Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

What is the Best Income Protection Insurance 2018?

When looking for income protection insurance it is natural to wonder what the best policy is but this can be hard to pin down as it will depend on your individual circumstances and requirements. Your occupation, employment status and health and lifestyle choices will all need to be considered when finding the best type of income protection for your personal circumstances.

More than anything it is most important to make sure your policy covers you in your ‘own occupation’, beware of ‘suited occupation’ or ‘activities of daily living’ cover.

If we consider which policy could be the best based on the plans coverage, terms and conditions, exclusions and payout rate we should be able to help narrow down your search considerably and put you in a much better position when deciding on the most appropriate cover.

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Getting the best cover…

This really depends on whether you are looking for accident & sickness (AS) cover or whether you are looking for accident, sickness & unemployment (ASU) protection.

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
This 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).

graph-analysis

Ability to Payout Long-Term
Given LV’s average payout length in 2011 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.

 

Including Unemployment Cover

When looking for accident, sickness and unemployment cover great care needs to be taken as most of these polices will be payment protection plans.

Payment protection plans often use the suited occupation definition of incapacity (where you are not actually covered in your own job role), have reviewable premiums (where the insurer has the right to change the amount they charge you) and can usually only payout for a maximum period of 12 months.

girl-rain-umbrella

Unemployment insurance with guaranteed premiums

If you are looking for a decent income protection plan (with own occupation cover and a long-term payout period) then Liverpool Victoria have a very good policy called the LV Mortgage & Lifestyle protection plan. This is currently the only policy in the market where you can have guaranteed premiums for redundancy protection.

However, this plan is not available to many manual workers or may not be as cost-effective as taking out a separate income protection plan for accident & sickness and another payment protection plan for unemployment only cover.

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Income Protection
 

Which Income Protection Cover has the best Terms and 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).

best income protection provider terms

Read the fine print

When deciding which income protection plan is best for you 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 Hollow Friendly). We generally do not recommend these plans in favour of policies that would use the own occupation incapacity definition throughout the entire length of a claim.

From start to finish a very professional and courteous outfit. A very efficient company with a no nonsense approach. Would recommend.

Andrew Giles
10/04/2018
 

Which insurers have the least exclusions?

With income protection cover 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.

No standard exclusions for accident or sickness

  • Aviva
  • Liverpool Victoria
  • British Friendly
  • Exeter Family Friendly
  • Vitality
  • AIG

Some standard exclusions for accident or sickness

  • Legal & General – Incapacity resulting from drug, alcohol or solvent abuse;
  • Aegon – War or civil commotion.

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 so please contact us so an adviser can arrange a suitable plan for you.

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).

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Which insurers 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 Claims Statistics

 

When choosing our personal protection we want to know it is going to pay out when we need it to.

By choosing a product or specific insurer from the menu below you will be able to view the claims payout rates for all of the main UK insurers for income protection, life insurance and critical illness insurance.

Insurer
2014
Percentage of Successful Claims
2015
Percentage of Successful Claims
2016
Percentage of Successful Claims
Critical Illness Insurance
Aegon
93%
97%
95%
Legal & General
92.2%
91.5%
92.6%
Aviva
93.2%
92.5%
92.3%
AIG
-
91.4%
92.3%
Royal London
94%
93%
92.2%
Liverpool Victoria
88%
91%
90%
Zurich
91%
92%
90%
Bright Grey
94%
-
-
Scottish Provident
94%
-
-
Friends Life
94%
93%
-
Income Protection
Holloway Friendly
96%
96.9%
98%
British Friendly
96.7%
97.8%
97%
Shepherds Friendly
96.7%
97.6%
97%
Royal London
90%
94%
95.6%
Legal & General
93.9%
95%
94.4%
Exeter
94%
94%
94%
Cirencester Friendly
94%
94%
94%
Vitality Life
-
-
94%
Aviva
93.2%
92.4%
92.6%
Liverpool Victoria
85%
92%
90%
Zurich
93%
87%
85%
Aegon
92%
85%
85%
Friends Life
86%
84%
-
Life Insurance
Scottish Widows
99%
98.9%
99.4%
Vitality Life
-
99%
99%
Aviva
99%
98.9%
98.9%
Legal & General
98.30%
97.9%
98.6%
Liverpool Victoria
98%
97%
98%
Zurich
99.8%
98.5%
98%
Aegon
98%
98%
98%
Royal London
98%
98%
96.8%
AIG
-
92.2%
95%
Friends Life
99%
99%
-
 

Which insurers offer the best premiums?

The premiums offered by each insurer depend on a number of factors, such as your age or whether you smoke, along with the policy details such as the policy deferred period.

One of the main pricing factors is your occupation because the risk of injury varies considerably depending on the type of job you do. It is very important to note that some insurers may offer a low premium because they are not offering ‘own occupation’ cover, which is often the case for people who work in very manual occupations.

You can use our income protection quotation system to see how much the premiums would be for you and compare the best income protection plans online. Alternatively feel free to give us a call on 0208 432 7333 and we would be happy to recommend some suitable options.

samantha-haffenden-angear

“Whilst some insurers now have their own direct sales teams, you won’t pay any extra arranging cover through an independent adviser, like Drewberry. We have the expertise and knowledge to find the best cover for you from across the whole market. We do all of the legwork for you from start to finish, including completing the application for you over the telephone.”

Samantha Haffenden-Angear
Independent Protection Expert at Drewberry Insurance

Best 7 UK Income Protection Insurance

Comparing the Best 7 UK Income Protection Insurers

aviva

Aviva

Aviva Income Protection Solutions is the Income Protection offering of Aviva, which can trace its origins back to 1797. The company today was formed from the merger of Norwich Union and CGU PLC.

Aviva Income Protection

  • Cover up to age 70
  • Maximum benefit: 55% of income
  • Definition of incapacity: Own occupation
  • Deferred Period: 4 / 8 / 13 / 26 / 52 / 104 weeks
british friendly

British Friendly

British Friendly is a UK friendly society based in Bedford that was founded in 1902. Today it has more than 14,000 members and is one of the country’s largest friendly societies. British Friendly specialises in providing Income Protection.

British Friendly Income Protection

  • Cover up to age 70
  • Maximum benefit: 70% of income (capped at £45,000 per year)
  • Definition of incapacity: Own occupation
  • Deferred Period: Day 1 / 1 / 4 / 8 / 13 / 26 / 52 weeks
cirencester friendly

Cirencester Friendly

Cirencester Friendly has been providing Income Protection for UK workers for more than 120 years. Founded as a friendly society in 1889, it today has more than 30,000 members and covers most jobs on an own occupation basis. In 2017, Cirencester Friendly won the COVER Excellence Customer Care Award.

Cirencester Friendly Income Protection

  • Cover up to age 70
  • Maximum benefit: 65% of income (capped at £65,000 per year)
  • Definition of incapacity: Own occupation
  • Deferred Period: Day 1 or 4 / 8/ 13 / 26 / 52 weeks
Legal & General

Legal & General

Legal & General was founded in 1836 as an insurance company for lawyers. It has since expanded considerably and today has more than 10 million protection customers worldwide. Legal & General offer both long-term and short-term Income Protection.

Legal & General Friendly Income Protection

  • Cover up to age 70
  • Maximum benefit: 60% gross taxable earnings (maximum of £200,000 per year)
  • Definition of incapacity: Own occupation
  • Deferred Period: 4 / 13 / 26 / 52 weeks
Liverpool Victoria

Liverpool Victoria

Liverpool Victoria is one of the UK’s leading friendly societies. It has around 5.8 million customers, 1.1 million of whom are members. Liverpool Victoria’s Income Protection involves a broad range of different products to suit differing needs.

LV Income Protection

  • Cover up to age 70
  • Maximum benefit: 60% of income (max. monthly benefit: £12,500)
  • Definition of incapacity: Own occupation
  • Deferred Period: 1 / 2 / 3 / 6 / 12 months
Royal London

Royal London

Royal London was founded in 1861 and became a mutual society in 1908. Today it is the UK’s largest mutual life, pensions and investments company. Royal London has long operated both the Bright Grey and Scottish Provident brands and their Income Protection offerings; between 2014 and 2016 both were rebranded to Royal London.

Royal London Income Protection

  • Cover up to age 70
  • Maximum benefit: 65% of the first £15,000 and 55% of the remainder, (max. £250,000 p.a.)
  • Definition of incapacity: Own occupation
  • Deferred Period: 4 / 8 / 13 / 26 / 52 weeks
Vitality

Vitality

Although only founded in 2007, Vitality has grown to become one of the country’s leading protection companies. Vitality offers an innovative approach to insurance, providing consumers with discounts if they keep up with a health and fitness regime and pass annual health checks.

Vitality Income Protection

  • Cover up to age 70
  • Maximum benefit: Comprehensive policies – 60% of your earnings capped up to £2,500 per month and 50% of any earnings above
  • Definition of incapacity: Own occupation
  • Deferred Period: 1 week or 1 / 3 / 6 / 12 months
expert advice finding the best UK income protection insurance policy

Expert advice on finding the best Income Protection

Using our quick and easy online Income Protection quote service can be a good start as you research the best policy for your needs, showing you a range of options with details of:

  • The requested level of life cover
  • The requested deferred period
  • The policy’s occupation definition
  • The payout percentage rate (if published by the insurer)
  • The requested policy term
  • Whether premiums are guaranteed or reviewable.

If you see an option you like the look of, you’ll be able to view the key facts of the policy. As with any insurance, reading the terms and conditions with care is something you should always do.

tomconnerportraitround

We exist to ensure you have the information and the support you need when considering your financial protection. Please don’t hesitate to give us a call on 02084327333, we are here to help.

Tom Conner
Director at Drewberry Insurance

Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Policy
Income Required
per
month
Date of Birth
Loading your options...
Thank you for using our Quote Tool
If you need some help, just call us!
T: 0208 432 7333
Our in-house Experts are here to provide FREE impartial advice!
Our Experts can answer all your questions
Our Experts can send you more appropriate options based on your personal circumstances

Very important if you are either Self-Employed or a Company Director.

Our online quote tool is good but our Experts are better

Oue Experts have access to far more insurers and can often find a better deal offline.

Saves you time, let our Experts do what they are best at

Frequently Asked Income Protection Insurance Questions

 
I was wondering whether income protection insurance premiums can go up with age? I can afford the premiums...
 
I can see that some plans seem to base the amount of income protection cover on earnings, often as a...
 
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