When considering Income Protection Insurance it makes sense to try and find out which is the best policy but this can be hard to pin down as it will depend on your individual circumstances and requirements.
There are a number of factors which will need to be considered when searching for the best Income Protection policy including:
Your occupation
Employment status
Current health and lifestyle choices
Sick pay entitlement and savings
Each insurer has their own terms, underwriting and preferred type of client type so depending on how risky your job is or whether you smoke will impact on the best provider for you.
If your primary concern is protecting your income against the risk of illness or injury, then the best policies tend to have the following features:
Own Occupation Incapacity Definition
An Own Occupation definition of incapacity means that the plan will payout if you are unable to undertake your specific job due to any illness or injury (please note that many Payment Protection Plans use the ‘suited occupation’ definition of incapacity).
Long-Term or Short Term Income Protection?
Short term income protection is considered a budget option as it will often have a maximum claim length of 2 years. Traditional long term income protection would continue to pay a claim right up to the end of the policy term if you are unable to return to work.
Given LV’s average payout length of 7 years, it makes sense to take out a plan that wouldn’t limit the length of time it can payout for (i.e. it can payout until retirement if you are unable to return to work).
Popular policies with these characteristics include plans provided by Liverpool Victoria (LV), Aviva and Exeter Family Friendly.
If you are on a tight budget, short term cover is better than no cover at all.
However, the best income protection will protect you for your entire working life right up until retirement.
Unemployment Cover is not usually offered under Income Protection plans, but there are some instances where it is available as an optional add-on. However, when looking for insurance policies that cover accident, sickness and unemployment, great care needs to be taken as many of these polices will be Payment Protection rather than Income Protection.
Avoiding Payment Protection ⚠️
We normally advise that people looking to protect their income avoid purchasing PPI because often the protection they provide isn’t as comprehensive as a traditional Income Protection policy.
They often use the suited occupation definition of incapacity (which means you can’t claim if you are fit enough to work in other job roles), have reviewable premiums (where the insurer has the right to change the amount they charge you based on a range of factors) and can usually only payout for a maximum period of 12 or 24 months.
If you are certain that you want unemployment cover, it may be worthwhile considering purchasing a separate Unemployment Insurance policy. This will ensure that you can still claim on a long-term basis for accident and sickness as well as claim benefits on a short term basis if you are made redundant.
Which Income Protection Cover Has The Best Terms & Conditions?
As mentioned above, it is important to take out a plan that provides own occupation incapacity protection so you are covered in your specific job role.
Lesser incapacity definitions include ‘suited occupation’ cover (where the insurer would assess your skills, experience and education and could decline a claim if they thought you were capable of undertaking another ‘suited’ job) and ‘activities of daily living / work tasks’ (where the insurer would make you undertake functional tests like walking or getting dressed before they would pay a claim).
Read the Fine Print
When deciding which is the best Income Protection plan for you, it is vital for you to check the terms and conditions as there are some plans in the market that would switch from own occupation cover after 12 or 24 months of a claim (such as Legal & General if you are a manual worker and Holloway Friendly).
Which Income Protection Has The Least Exclusions?
With any good Income Protection policy, it is often the case that policies do not have any standard exclusions, which means that the insurer would payout for any medical condition that prevented you from working, irrespective of how it arose.
Please note though if you travel overseas for business or think there is a possibility that you may reside outside of the UK in the future then some policies do have restrictions. If you need help please don’t hesitate to pop us a call on 02084327333 or email help@drewberry.co.uk.
Redundancy Insurance Exclusions
Most insurers have an initial unemployment exclusion period where you cannot make a claim within the first 120 or 180 days of taking out the policy, and most plans only cover forced redundancy (i.e. you cannot take voluntary redundancy or get asked to leave due to poor performance).
Which Income Protection Providers Have The Best Payout Rates?
It is very natural to consider one Income Protection insurer as being better than another based on payout rates (i.e. the percentage of all claims that are paid).
For those insurers that do publish payout rates they tend to be very high, with most providers publishing rates that are over 90% of all claims made.
Please note that the payout rate is very unlikely to ever be 100% as there are always going to be issues with people not being truthful on their application and trying to claim for current / ongoing conditions.
Insurer
2017
2018
2019
Aegon
92.1%
93%
100%
Zurich
87%
95%
98%
Vitality
96%
97.8%
96.4%
Shepherds Friendly
96%
95.8%
96.3%
Cirencester Friendly
94.7%
95.2%
95.7%
Holloway Friendly
96%
98%
94%
British Friendly
92.4%
94.7%
94%
Liverpool Victoria
96%
95%
93%
The Exeter
91%
93%
91%
Aviva
88.8%
86.3%
85.7%
Legal & General
95%
95%
82%
Payout statistics alone should not be used to decide which insurer offers the best Income Protection.
Instead, payout rates should be used as a rough guide to compare successful claims across the industry as a whole.
Making An Income Protection Claim
Paying claims is the most important thing income protection insurers can do and over the past few years, there have been a number of developments making it easier for clients to claim as well as speeding up the process of approving claims.
A number of insurers are now accepting claims over the telephone completely doing away with lengthy claims forms.
If you have an income protection policy and have suffered an illness or injury which you think will result in a claim you are best to let your insurer know as soon as possible. The sooner they can start processing a claim the quicker they can approve it and start paying your benefit.
British Friendly and Neil’s Cancer Claim…
Neil is a client of Drewberry who took out an Income Protection policy with British Friendly. He’d had his policy for just 4 years before falling ill.
After experiencing a bout of stomach pains, Neil took himself to his GP who referred him on for further tests. These tests discovered that he unfortunately had bowel cancer, and it was already at stage 2.
Neil needed surgery to remove the cancer, but developed post-operative sepsis and had to spend several weeks in hospital recovering, completely unable to work.
British Friendly began paying him a proportion of his earnings after his deferral period, allowing him to keep up with all the important bills, such as his mortgage, which he was unwell.
The premiums offered by each insurer depend on a number of factors, such as:
Your Age
Smoker Status
Your Current Health
Your Occupation
The Level and Length of Cover
Deferred Period
Different insurers like different risks with some being more competitive when covering higher risk occupations or when needing a much longer deferred period.
As a result of this there is no hard and fast rule who will be most competitive particularly if you have medical conditions you need to disclose.
You can use our Income Protection comparison tool to see how much the premiums would likely cost from the best income protection insurers who will quote online. However nothing beats speaking to an expert adviser as there are some insurers who simply don’t provide online results.
Please feel free to give pop us a call on 02084327333 to gain access to all quotes that would be available to you.
To provide you with an example cost of Income Protection, we have had to make a number of assumptions:
The client is a healthy and in a low risk occupation
They want to cover £1,500 per month
They can survive without an income for 8 weeks
They are planning on retiring at age 65
They would like to fix the cost of the policy with guaranteed premiums.
The Income Protection quotes detailed below represent the cheapest policy that matches the above criteria from the best income protection insurers in the UK.
Age
🚭
🚬
Accident & Sickness Insurance
Age 25
£26.77
£36.09
Age 35
£39.13
£49.58
Age 45
£56.35
£84.31
Accident, Sickness & Unemployment Insurance
Age 25
£68.47
£77.79
Age 35
£66.58
£77.03
Age 45
£100.60
£128.56
Income protection quotes accurate as of March 2022
Compare 12 Best UK Income Protection Insurance Providers In 2022
Being independent insurance brokers we work with all the top UK insurers when finding our clients the best cover.
To help you navigate the many potential pitfalls we have put together the table below summarising each of the major insurers products and our verdict on each of them.
65% of income up to £20,000; 55% of income between £20,001 and £100,000; and 45% of income more than £100,000.
Maximum benefit: £20,833
Claim Duration
Either:
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again.
24 months limited payment term
Pays out for up to 24 months for each incapacity. If you return to work for 6 consecutive months, you can claim again for the same illness / injury.
Deferred Period
4 / 8 / 13 / 26 / 52 weeks
Premium Type
Guaranteed
Claims Paid
100% in 2019, totalling £1.25 million
Additional Benefits
Aegon’s main additional benefits offering is Policy Plus. This offers:
Health and wellbeing service
Confidential support on a range of issues such as bereavement; martial / relationship concerns; consumer rights; legal and debt issues; and medical diagnoses
Second medical opinion service
If you develop a serious health condition, you can have a face-to-face consultation with a UK-based specialist to review your diagnosis
Other benefits available include:
Death benefit of £5,000 if you pass away while Aegon is paying a claim
Income guarantee of at least £1,500 if your income falls between taking out the policy and needing to claim
Rehabilitation / proportionate benefit to top up a reduced income from work if you can only return to work in a lesser role / on less hours after an illness / injury
The Drewberry Verdict
👍
High maximum benefit available
🏆
Winner: Best Protection Service at every Moneyfacts Awards between 2017 and 2020
5-star rating from Defaqto, an independent assessor of insurance policies
❌
Fairly limited additional benefits
❌
Maximum benefit of 55% of pre-incapacity earnings is lower than for some other insurers
60% of gross income up to £30,000; 55% between £30,000-£100,000; and 45% on gross income of £100,001+
Maximum benefit: £20,833 per month / £249,996 per year
Claim Duration
Either:
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again.
24 months limited payment term
Pays out for up to 24 months for each incapacity. If you return to work for 26 consecutive weeks, you can claim again for the same illness / injury.
Deferred Period
4 / 8 / 13 / 26 / 52 weeks
Premium Type
Guaranteed
Claims Paid
n.a.
Additional Benefits
Smart Health is AIG’s main additional benefits offering. It includes:
24 / 7 digital GP service
Fitness and nutrition plans from qualified sports coaches / nutritionists
Mental health support / counselling
Annual health check via a pinprick blood test
Second medical opinion from Best Doctors
The Drewberry Verdict
👍
Smart Health provides an excellent range of additional benefits, among the best in the market
👍
High monthly benefit available
🏆
Winner: Outstanding Insurer of the Year, 2020 LifeSearch Awards
Winner: Best Health & Wellness Offering, 2020 Cover Customer Care Awards
Winner: Best Added Value Provider, 2020 Cover Excellence Awards
5-star Defaqto rating
❌
AIG does not publish claims data for Income Protection
65% of gross earnings up to £60,000; 45% of gross earnings above £60,000
Maximum benefit: £20,000 per month / £240,000 per year
Claims Duration
Either:
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again
24 months limited payment term
Pays out for up to 24 months for each incapacity. If you return to work for 6 consecutive months, you can claim again for the same illness / injury.
Deferred Period
4 / 8 / 13 / 26 / 52 / 104 weeks
Premium Type
Guaranteed or reviewable
Claims Paid
85.7% in 2019, totalling £44 million
Additional Benefits
Aviva DigiCare+
Free as standard, Aviva DigiCare+ is a health and wellbeing service offering:
24 / 7 Bupa Anytime HealthLine, staffed by trained nurses to help manage minor health concerns
A Health MOT
Nutrition advice
Gym discounts
Up to six sessions of video / phone psychotherapy per year
Second medical opinion service on a recent diagnosis and your treatment options
Bereavement support if you lose a family member.
You can also opt to pay an extra £36 annually for three Digital GP appointments per year.
Other Free Benefits
Back to work benefit, paying a top up to your earnings if you can only return to work in a lesser role / on less hours after illness / injury
Hospitalisation benefit of £100 per night if you spend more than 6 consecutive nights in hospital during your deferral period, up to a maximum of 90 nights per policy term
Trauma benefit, paying the lower of £40,000 or six times your monthly benefit if you suffer one of six traumatic injuries
Optional Paid Benefits
Fracture cover, paying a lump sum of between £2,000 and £6,000 for a specified fracture depending on the type of fracture and the bone you break
Global treatment, offering you and your child(ren) access to Aviva’s Best Doctors service, a second medical opinion and overseas medical treatment if you need a medical procedure
The Drewberry Verdict
👍
Aviva DigiCare+ is a great suite of additional benefits available for free
👍
High monthly benefit available
👍
Further additional benefits available at cost, such as fracture cover
👍
Special conditions available for doctors, surgeons and other NHS workers
👍
104 week deferral period available, the longest in the market
🏆
Winner: Best Individual Income Protection Provider, 2019 Health Insurance Awards
Winner: Best Customer Service, 2020 Health Insurance Awards
5-star Defaqto rating
❌
While Aviva offers a digital GP service, which not every insurer does, it’s at extra cost and even then capped at three appointments per year
❌
The percentage of successful claims paid is a little on the low side
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again.
Short term cover Pays out for 1, 2 or 5 years per claim depending on the option you choose
Deferred Period
Long term cover: 4 / 8 / 13 / 26 / 52 weeks
Short term cover: 4 / 8 / 13 weeks
Premium Type
Age-banded
Claims Paid
94% in 2019
Additional Benefits
Terminal illness benefit, waiving the deferral period and paying out straight away if you’re diagnosed with less than 12 months to live
Recovery support benefit, a lump sum of 4 times your weekly benefit 4 weeks after your final benefit payment to bridge the gap between your claim ending and your next pay day after returning to work
Care assistance benefit of £125 per week for up to 26 weeks if your spouse / partner / child suffers a serious illness / injury that means they need at least 35 hours a week of care for 4+ weeks
Death benefit of 6 times your benefit if you die during the policy
Bereavement benefit of 13 times your weekly benefit if your spouse / partner / child (up to the age of 18) dies during your policy term
Mutual Benefits
Mutual Rewards
Discounted gift cards / e-vouchers offering savings of up to £250 a year on high street shopping, plus entry into quarterly prize draws with prizes of up to £1,000
Mutual Support
Each year you get 150 Health Support Points for services such as virtual GP consultations, physiotherapy, counselling and second medical opinions. Once you’ve used your points you can still access these benefits at additional cost
Mutual Wellbeing Access to services to help improve / maintain wellbeing, such as health MOTs, a health and wellbeing app and information on leading a healthier lifestyle
Mutual Partners
Discounts on services from British Friendly partners, such as Legal & General’s power of attorney / will writing service and 20% off Staysure Travel Insurance, which specialises covering those with pre-existing medical conditions
The Drewberry Verdict
👍
Offers own occupation cover to riskier occupations that many other insurers won’t cover on this basis or charge more due to their job
👍
Maximum entry age (the oldest you can be when you buy cover) of 64, the highest available in the market. Only one other insurer offers this entry age.
🏆
5-star Defaqto rating
❌
While British Friendly covers 70% of your earnings, the highest percentage available with personal Income Protection, it caps your benefit at £45,000 per year. If you earn more than this, another insurer might be better.
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again.
Deferred Period
Day 1 or 1 / 4 / 8 / 13 / 26 / 52 weeks
Premium Type
Guaranteed or age-banded
Claims Paid
95.7% of all claims in 2019
Additional Benefits
Terminal illness benefit worth 6 months of your benefit if a doctor diagnoses you with less than 12 months to live
Recovery benefit, which tops up to your income if you can only return to work after an illness / injury on reduced hours / in a lesser role
A Friendly Voice, a telephone helpline staffed by nurses who offer advice and emotional support to those suffering from, or caring for someone with, a physical or mental health issue
GP24, a virtual GP service offering 24 / 7 telephone calls with a GP, video appointments 8am-10pm 7 days a week (except Christmas day), private prescriptions and referrals for further investigation / treatment
Children’s critical illness support, a lump sum of £2,500 if your child (up to age 21) develops one of ten critical illnesses
Optional Add-Ons for an Extra Premium
Fracture cover
A lump sum of £1,000 if you sustain a comminuted, complicated, compound, depressed or simple fracture to any of the 19 parts of the skeleton Cirencester lists
Hospitalisation benefit
£50 per night for each night you spend in hospital. Cirencester pays this after 3 consecutive nights backdated to the first night. You can claim for up to 21 consecutive nights and for up to 21 nights per year.
Immediate death benefit
A payment of £7,500 to your family if you die during the policy term before the age of 70
The Drewberry Verdict
👍
Offers own occupation policies to those in some higher-risk occupations that other insurers don’t cover on this basis
👍
Good range of free additional benefits, including a remote GP service, something often only offered by larger insurers
🏆
5-star Defaqto rating
❌
Annual benefit cap of £52,000. Higher earners needing more than this might be better with another insurer.
❌
Maximum entry age is 54, so you can’t take out a policy if you’re older than this. This is one of the lowest in the market.
❌
No cover if you work overseas for more than 8 weeks in a calendar year. This is more restrictive than many other insurers.
Full cover to term
Pays out with no limit, up to the date your insurance ends
12 / 24 months limited payment term
Pays out for 1 or 2 years for each incapacity depending on which option you select
Deferred Period
1 / 4 / 8 / 13 / 26 / 52 weeks
Premium Type
Either:
Age-banded
The amount you pay will change with your age each year. You’ll pay less than you do with the level price option when you’re younger, which can help if you’re on a budget, but the price will go up as you get older. This is because the risk of being too unwell to work goes up with age.
Level-priced
A level price that won’t go up because you’ve got older. The price you pay at the start will stay the same over time.
Claims Paid
98% in 2021
Additional Benefits
Terminal illness cover worth 6 times your monthly benefit if you are diagnosed with less than 12 months to live
Benefit guarantee of the lower of £1,500 or your monthly benefit if your income falls between taking out the policy and claiming
Rehabilitation benefit, paying an income top up for up to 12 months if you can only go back to work part time / in a reduced role due to illness / injury
Medical expenses benefit, a lump sum towards treatment a doctor recommends to speed up recovery following a claim, where Holloway’s Chief Medical Officer agrees
Premium holiday, allowing a break from the policy by pausing premiums and your ability to claim and the ability to restart it later without medical questions
Member assistance programme, a 24 hour telephone helpline offering counselling and advice from specialists on topics such as employment, health and consumer rights
The Drewberry Verdict
👍
While most insurers let you increase your benefit if you increase your mortgage, Holloway also lets you increase your benefit if your rent rises after moving to a new rental property / your landlord putting up your rent
👍
If you have hazardous hobbies, you can choose to exclude related illness / injury from your policy to avoid higher premiums. Most insurers don’t offer this and either charge more due to such hobbies or exclude them outright without charging less.
🏆
Winner: Best Individual Income Protection, 2019 Cover Excellence Awards
Winner: Best Claims Support, Moneyfacts Awards 2019
Winner: Protection Review 2019
5-star Defaqto rating
❌
If you choose age-banded premiums, Holloway reserves the right to review them up or down after 5 years on top of raising them with age. With most other insurers, age-banded premiums only rise with age.
60% of gross earnings up to £60,000; 50% of gross earnings above £60,000
Maximum benefit: £20,000 per month / £240,000 per year (£14,000 per month / £168,000 per year with indexation)
Claims Duration
Either:
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again.
12 / 24 months limited payment term
Pays out for up to 12 or 24 months for each incapacity. If you return to work for 6 consecutive months, you can claim again for the same illness / injury.
Deferred Period
4 / 8 / 13 / 26 / 52 weeks
Premium Type
Guaranteed
Claims Paid
82% in 2019
Additional Benefits
Income guarantee of the lower of £1,500 per month or your benefit if your income falls between taking out cover and claiming (doubled to £3,000 for NHS dentists, doctors, midwives, nurses and surgeons)
Proportionate benefit, topping up your income if you can only return to work in a reduced role / on reduced hours following illness / injury
Hospitalisation benefit of 1/30th of your monthly benefit (up to £150) per night if you spend more than 8 consecutive nights in hospital for up to 13 weeks or until your deferred period ends, whichever is sooner
Death benefit worth 12 times your monthly premium if you die during the life of the policy
Rehabilitation service from nurses, physiotherapists and occupational therapists to help you return to work after a claim
Nurse Support Services
A telephone helpline staffed with qualified nurses to offer advice and support if you / an immediate family member develops a physical or mental health condition, disability, trauma or bereavement.
It offers:
Bereavement support
Advice on treatments and coping strategies, and help sourcing specialist equipment to make life easier after a serious illness / disability
Second medical opinion with a UK-based consultant if you have concerns about a diagnosis or treatment
Long-term support for a range of mental health conditions including depression, stress, PTSD and bipolar disorder
Emotional and practical support if you care for an elderly / sick loved one
A personal nurse adviser to offer telephone advice while you recuperate at home after a hospital stay
Support with eldercare, including help ensuring relatives can live independently or in a residential home and advice on how to keep them safe
The Drewberry Verdict
👍
High maximum benefit of £240,000 per year (£168,000 per year if you index your benefit). This is one of the highest available.
👍
Specialist cover for NHS medical professionals with features such as dual deferred periods to match NHS sick pay and a higher income guarantee
🏆
Winner: Best Protection Provider, 2020 TMA Partner Awards
5-star Defaqto rating
❌
Successful claims figures for 2019 are a little on the low side
❌
If you’ve been self-employed for 12 months or less when you apply, Legal & General caps your benefit at 35% of annual earnings rather than the maximum offered to others. Newly self-employed workers are therefore likely to find another provider better.
❌
Many insurers offer a death benefit worth a multiple of your monthly benefit. However, Legal & General’s death benefit is a multiple of your monthly premium, which will likely be much lower.
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again.
Budget short term option
Pays out for up to 12 or 24 months for each incapacity. With the 12 month option, you can only choose guaranteed premiums.
Deferred Period
4 / 8 / 12 / 26 / 52 weeks
Premium Type
Guaranteed or reviewable
Claims Paid
93% in 2019, totalling £14.2 million
Additional Benefits
LV Doctor Services, offering telephone- or app-based access to remote GP services, private prescriptions and a second medical opinion for you and your children (up to age 16)
Income guarantee of the lower of £1,500 per month or your original benefit if your income falls between taking out cover and claiming (doubled to £3,000 for NHS doctors and surgeons)
Fracture cover, paying up to £2,200 once per year if you suffer a specified fracture
Death benefit if you die during the policy term worth £5,000 if you’ve had the policy for 4 years or less, rising to £10,000 for policies 4+ years old
Parent and child cover, a payout of 6 times your monthly benefit, up to £25,000, if your child (up to age 21) develops a specified illness during the policy term
The Drewberry Verdict
👍
Good range of free additional benefits, including fracture cover as standard. This is rarely free with other Income Protection providers.
👍
Offers special features for NHS doctors and surgeons, such as an enhanced benefit guarantee and a split deferred period
🏆
Winner: Best Income Protection Provider at every Moneyfacts Awards 2010-2020
5-star Defaqto rating
❌
Shortest deferral period is 4 weeks. If you couldn’t wait 4 weeks for a payout, another insurer might be more suitable.
65% of gross annual income up to £15,000; 55% of the remainder
Maximum benefit: £250,000 per year
Claims Duration
Either:
Full cover to term
Pays out with no limit, right up until your chosen retirement age if you can never work again
Short term
Pays out for up to 1, 2 or 5 years for each incapacity depending on the option you choose
Deferred Period
4 / 8 / 13 / 26 / 52 weeks
Premium Type
Guaranteed
Claims Paid
91.6% of new and ongoing claims in 2019; 80.6% of all new claims in 2019
Additional Benefits
Income guarantee of the lower of £1,500 per month or your original benefit if your income falls between taking out cover and claiming (doubled to £3,000 for NHS doctors)
Fracture cover, paying a lump sum of up to £4,000 if you suffer a specified fracture. You can claim twice per policy year.
Hospitalisation benefit of £100 per night for up to 90 nights if you spend more than 6 consecutive nights in hospital
Back to Work Benefit paying 25% of your last benefit payment 1 month after you return to work after an illness / injury with short-term cover. This rises to 50% with long-term cover. It’s followed by 10% of your last benefit for short term cover and 25% for full term cover 2 months after you return to work.
Death benefit worth 12 times your monthly premium if you die during the policy term
Helping Hand
Free with all Royal London Income Protection policies, this offers:
A second medical opinion service
Support when recovering from a heart attack
Speech and language therapy after a stroke
Complementary therapies to help manage symptoms or help with recovery
Access to legal and career helplines for independent advice on employment rights and support in getting back to work sooner.
The Drewberry Verdict
👍
Good range of free additional benefits, including fracture cover. This is rarely free with Income Protection.
👍
High maximum benefit of £20,000 per month / £250,000 per year in cash terms
👍
Special features for NHS medical professionals, including an enhanced benefit guarantee, NHS sick pay mirroring and sabbatical cover
👍
Self-employed workers can cover fixed payments you must make alongside your wages, for example for services such as insurance or for loans / other credit
🏆
Winner: Best Protection Provider, 2020 Money Marketing Awards
5-star Defaqto rating
❌
Cover limited to 65% of the first £15,000 of your earnings and 55% of the remainder. This is lower than many other insurers. If you more than 55% of your earnings above £15,000, another insurer might be more appropriate.
❌
Many insurers offer a death benefit worth a multiple of your monthly benefit. However, Royal London’s death benefit is a multiple of your monthly premium, which will likely be much lower.
Maximum benefit: £4,083 a month / £49,000 per year
Claims Duration
The Best Way To Set Up Income Protection
When setting up your Income Protection Insurance policy you can opt to go direct to an insurer or take out cover through an intermediary. It is important to recognise the difference as one provides you with a lot more protection than the other.
Going Direct to an Insurer
If you go direct to an insurer to set up your policy it is considered a non-advised sale. As you personally have made the decision to take out this policy there is no financial protection should the policy be inappropriate – the responsibility lies on your shoulders.
Using an Adviser
Utilising an adviser who provides an advised sale means they are responsible for the policy they help you set up. They need to understand your circumstances fully including any existing health conditions to make sure you take out the most suitable cover for your needs. If it turns out their advice was not appropriate the responsibility sits with the adviser.
Here at Drewberry we provide a fully advised service so you benefit from expert advice and know you have that additional level of protection should something go wrong.
What Is Better Income Protection Or Critical Illness Cover?
Although these products may seem similar they provide financial protection in different ways. Each has their own merits and are used in different ways.
Income Protection is designed to cover anything that medically prevents you from doing your job and pays out a monthly income to cover your regular bills.
Providing you choose the ‘own occupation’ definition of incapacity, Income Protection pays out for accidents, illnesses and injuries that prevent you from doing our specific job role. You won’t be asked to perform any other job role if you can’t do your own occupation.
Common illnesses claimed for under Income Protection policies include mental health issues, musculoskeletal problems (e.g. bad backs) and cancer.
Critical Illness Cover pays out a tax free cash lump sum should you be diagnosed with a critical illness (such as cancer, heart attack or stroke) of a specified severity to claim.
Critical illness cover is limited to the illnesses defined in the policy terms and conditions where Income Protection pays out for anything that medically prevents you from working.
Do I Really Need Income Protection?
The question of whether you need Income Protection ultimately depends on your circumstances, but here are some factors to consider if you fell ill without it:
Could you survive on your savings for any considerable length of time?
Could you survive on government benefits, typically Statutory Sick Pay at £95.85 per week or Employment and Support Allowance at £74.35 per week?
How would your family cope with a sudden loss of income in terms of paying the bills, keeping up with the rent / mortgage, buying groceries, keeping a car on the road etc. if they didn’t have some form of continuation of income?
If you’re not sure about the answers to these questions, Income Protection might be something you consider to protect your family and your finances in case you can’t work through accident or sickness.
What's The Maximum Income Protection Benefit?
The maximum Income Protection benefit is typically 70% of your income for a personal policy. Insurers tend to offer between 50%-70% of your gross (pre-tax) income as a benefit.
The reason you can’t insure 100% of your gross income is because, after taxes and National Insurance, you don’t receive 100% of your gross income from your employer or your self-employed activities each month / year.
Most insurers will have a maximum ceiling in terms of the pounds sterling sum they’re willing to cover you for on an annual basis. This could be as low as £45,000 or up to £250,000, so it’s important you choose the right insurer for your level of income.
How Long Does Income Protection Last?
Short-Term Income Protection will pay out for a maximum of 1, 2 or 5 years per injury / illness per claim. However, the policy lasts until your set retirement age, so you can claim as many times as you need to with different illnesses or injuries for the maximum term.
If you suffer an illness / injury that takes you beyond the maximum claims period on Short-Term Income Protection, your payments will cease.
Long-Term Income Protection is a more comprehensive option as you can claim as many times as you need to, for as long as you need to, right up until retirement age.
This means if you’re ever so ill you can never work again, you’ll be entitled to receive your Income Protection benefit right up until your chosen policy cease age.
Compare Best Income Protection Quotes & Get Expert Advice
Finding the best Income Protection can be a bit of a minefield particular given the confusion that can occur with Payment Protection and the importance of getting ‘Own Occupation’ cover.
We exist to ensure you have the information and the support you need when setting up the most appropriate Income Protection for your circumstances.
Why Speak to Us?
We started Drewberry™ because we were tired of being treated like a number.
We all deserve a first class service when it comes to issues as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.
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