Answered by Tom Conner
What to consider when choosing an end date for Income Protection cover
The purpose of income protection insurance is to cover your lifetime earnings from the risk of illness or injury. One of the main benefits of this cover is that policies can payout for many years or even decades if you are not well enough to return to work.
Traditionally age 65
It usually makes sense to set the policy cease age on the plan at the age you expect to retire. Traditionally, it was common for plans to last until age 65 but as many of us now work past this age some insurers have started offering cover until age 70.
Large impact on premiums
If you do not have any expectation of working past a certain age then it may not make sense to take out a plan with a longer term length as the premiums can rise considerably for plans with older policy termination ages.
As the risk of suffering accident or sickness increases vastly with age the risk to the insurer is far higher during the years between age 60 and age 70. It is not uncommon for premiums to rise by over 40 per cent as the length of the plan is extended from age 60 to age 65, naturally depending on the insurer.
Public sector workers
It is common for some public sector workers to retire at an earlier age, such as for teachers and medical professionals. For these employees many insurers limit the length of cover to age 55 or age 60. This practice is likely to end as retirement ages start to increase.
It’s always helpful to get some advice from an expert. At Drewberry we offer a fee free service and as we are both independent and have whole of market access we can help find the most suitable options for your circumstances. Our telephone number is 01273 646 484 if you would like to discuss your needs further.
Frequently Asked Income Protection Insurance Questions
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