Legal and General Income Protection
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Founded |
1836 |
Documents
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Company Type |
Public Limited Company |
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Company Overview |
Legal & General was formed by Sergeant John Adams and five other lawyers in June 1836 in a Chancery Lane coffee shop. L&G have become a leader in the protection market with over 7 million customers for their life assurance, pensions, investments and general insurance plans. |
Income Protection Overview
Legal and General use an ‘Own Occupation’ incapacity definition for the vast majority of occupations…
The Legal and General product has a core premium which is guaranteed for the full term of your policy…
It is good to know Legal and General publish their claim statistics where many insurers still decline to do so…
The Legal and General product has an application which includes full medical underwriting so you know exactly where you stand from the outset…
Legal and General Policy Conditions
An overview of the key policy details of Legal and General Income Protection.
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Overview of Key Policy Details
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Policy Type |
Income Protection |
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Underwriting |
Public Limited Company |
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Premium Type |
Guaranteed |
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Maximum Claim Duration |
Unlimited |
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Incapacity Definition |
Own Occupation |
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Deferred Period |
4 / 13 / 26 / 52 weeks |
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Indexation |
Optional |
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Waiver of Premium |
Included |
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Maximum Cover |
60% Gross Taxable Earnings |
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Maximum Cover |
£16,666.00 |
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Max. Policy Cease Age |
70 years old |
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Min. Policy Term |
5 years |
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Min. Entry Age |
18 years old |
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Max. Entry Age |
60 years old |
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Guaranteed Insurability |
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Guaranteed Benefit |
Not Available |
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Overseas Travel |
If you travel to or reside in any part of the European Union, USA, Canada, Australia, New Zealand, Isle of Man or the Channel Islands, you will still be fully covered by your Income Protection Benefit. If you make a claim whilst you travel to or reside temporarily in any other parts of the world, then any benefit will only be paid for a maximum of six calendar months. |
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Policy Exclusions |
Alcohol or solvent abuse, or the taking of drugs other than those under the direction of a registered medical practitioner. |
Other Insurers
Drewberry reviews L&G Personal Income Protection…
Legal & General are an extremely large and reputable insurer with a solid income protection product. However, care needs to be taken if you are looking to include inflation indexation or spend the majority of your working day out of an office environment.
Key Comparison Points
- For occupation risk classes one and two (mainly office based workers) an Own Occupation definition of incapacity would be used throughout the life of a claim;
- For occupation risk classes three and four (mainly non-office based workers) an own occupation definition would only be used for the first 12 months of a claim, before switching to the very strict Activities of Daily Living (ADL) definition (other insurers would not do this;
- Please be aware that if you include the inflation indexation option Legal & General would increase your benefit each year in line with inflation but would increase your premiums by 1.5 times inflation (other insurers would not do this);
- L&G provide a hospitalisation benefit as standard, paying out 1/30th of your monthly benefit during the deferred period for each night spent in hospital (up to£150 per night and payable after seven consecutive nights in hospital);
- For individuals who want cover but who are on a tight budget, L&G also provide the option of a limited benefit period policy that could only payout for a maximum period of five years.
Policy exclusions
The only standard exclusion with the Legal & General income protection policy is for incapacity resulting from drug, alcohol or solvent abuse. It is also worth noting that the insurer would only payout for up to six months when residing or travelling outside the EU, North America or Australasia.
Financial strength
As a member of the FTSE 100 index, Legal and General is not only one of the largest insurers in the UK but also one of the largest companies in the UK. Formed in 1836 L&G have demonstrated their financial strength in all economic climates and held an IGD surplus of £4 billion in 2011, which is over twice the regulatory requirement.
Legal & General Income Protection – Questions and Answers
A series of commonly asked questions with regards to the policy coverage of the Legal and General income protection product.
Q. Does my cover increase over time automatically in line with salary rises or do I have the option to increase how much it would payout at a later date? I exact my income (and expenditure) to rise over time so want to ensure I’ve always got enough cover.
A. Unless you include the inflation indexation option your level of cover would remain fixed over the life of the policy, unless you specifically contact the insurer to increase your monthly benefit.
You are able to increase your monthly benefit at any time but the insurer would ask you to make a health declaration stating that your health is unchanged from when you initially took out cover. If you health has changed special terms may need to be applied to additional benefit insured.
However, nearly all insurers have guaranteed insurability options, which allow you to increase your level of cover after ‘lifestyle events’ without needing to make any medical disclosures. These events are listed above in the table for Legal & General (please note that limits apply).
Q. What happens if I’m making a claim and really want to go back to work but can’t find a job that pays anywhere near what I was earning before because I’m not fully recovered yet?
A.Most insurers, including Legal and General, have something in the contract called ‘proportionate benefit’, which says that the insurer would pay the difference between your old earnings level (typically in the 12 months prior to incapacity) and the new post disability income level if you had to take a lower paid job as a result of the illness or injury.
Would recommend to a friend!