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
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).
Ability to Pay Out 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
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 Plans rather than Income Protection.
We normally advise that people looking to protect their income avoid purchasing Payment Protection Plans 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 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).
Read the Fine Print
When deciding which is the best Income Protection plan, 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).
We generally do not recommend these types of plans despite them sometimes costing less than policies with own occupation incapacity definition throughout the entire length of a claim. This is because your ability to claim on these policies is reduced when the definition of incapacity changes and you may be forced back into work before you are fully recovered from your condition.
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
- Liverpool Victoria
- British Friendly
- Exeter Family Friendly
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).
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 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.
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 when finding the best Income Protection policy is your occupation. This is 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 02084327333 and we would be happy to recommend some suitable options.
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 Income Protection 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.
Independent Protection Expert at Drewberry Insurance
Comparing the Best 7 UK Income Protection Insurers
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.
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.
Director at Drewberry Insurance