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

Do you need Life Insurance, Critical Illness Cover or Income Protection?

Life Insurance, Critical Illness Cover & Income Protection

Life Insurance, Critical Illness Cover and Income Protection are the three pillars of the protection insurance market. Each product is designed to cover a very different risk, however, so it’s important to understand the difference between them before you make any decisions.

  • Income Protection – pays out a regular income if you’re signed off work for any medical reason that prevents you doing your job.
  • Critical Illness Insurance – pays out a cash lump sum should you be diagnosed with an insurer-specified serious (or ‘critical’) illness, e.g. cancer, a heart attack or stroke.
  • Life Insurance – pays out a cash lump sum should you pass away during the term of the policy (or a regular income if you’ve opted for Family Income Benefit).
Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Policy
Level of Cover
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
 

Which Protection Insurance Do I Need?

There’s various reasons you might take out protection insurance. You could be looking for illness insurance or to protect your family and their home were you to pass away. You may even be looking for a combination of the two.

Why Income Protection?

Income Protection is a comprehensive sickness insurance policy designed to pay out for anything that medically prevents you from doing your job.

It’s far more wide-reaching than Critical Illness Cover, which demands your illness must be one specified in the policy and of a certain severity to be able to claim. Major claims on such policies are for bad backs and mental health issues; these are by no means critical but can be nonetheless debilitating.

Why Critical Illness Insurance?

Whether on its own or packaged with Life Insurance, Critical Illness Cover pays out a lump sum if you’re diagnosed with a serious illness. This is typically used to repay a mortgage or other debt, or to adapt a home in the event of a serious disability.

The main three claims on these policies are for cancer, heart attacks and strokes. 1 in 2 people born after 1960 will get cancer at some point during their lives (Cancer Research UK), while 530 people a day are taken to hospital after a heart attack.

Why Life Insurance?

One of the biggest reasons people take out Life Insurance is to cover a mortgage. This ensures their loved ones can remain in the family home if the policyholder dies before paying off the loan.

Other reasons to take out Life Insurance include wanting to make sure the family is financially secure after the death of a breadwinner.

Need Help? Start Live Chat with our Experts  

Neil
Pensions Advice

Robert
Income Protection
 

What is Income Protection?

Income Protection is designed to insure your wages if accident or sickness prevents you from working. Also known as Accident & Sickness Insurance, it pays out a proportion of your gross (pre-tax) income to cover your core outgoings if you’re unable to do your job.

ask victoria slade, independent protection expert at drewberry, for income protection advice

When the ‘own occupation‘ definition of incapacity is used, the policy will pay out for any illness or injury that prevents you from doing your own specific job. This is the most comprehensive definition of incapacity and the only one that the advisers at Drewberry will recommend, as it’s the easiest to make a successful claim.

Victoria Slade
Independent Protection Expert at Drewberry

The cost of Income Protection depends on various different factors:

  • The benefit you choose
  • Your deferred period – how long you can wait before the benefit kicks in
  • Your age, health and smoker status
  • Whether you choose to index your benefit so it maintains pace with inflation
  • The policy cease age – how long the policy will pay out for, whether this is short-term (e.g. one or two years) or long-term, until your chosen retirement age.

Also known as Permanent Health Insurance, income protection can ‘top up’ the minimal state benefits you’re entitled to. For employed workers, Statutory Sick Pay is no more than £89.35 per week for 28 weeks and, if you’re self-employed, you don’t even get this.

Income protection insurance covers accidents and sickness that stop you working

Thereafter you’ll have to rely on Employment & Support Allowance, which is an absolute maximum of £109.65 per week after the first 13 weeks depending on how severe your disability is.

Income Protection has no upfront exclusions – what you are and aren’t covered for will depend entirely on your medical history.

It’s worth speaking with an independent protection adviser such as one of the team at Drewberry if you’re considering Income Protection.

We can make sure you’re looking at the right policy options and ensure you find the most comprehensive cover with an insurer that will be favourable for your needs. All this can help you find the best Income Protection policy as well as saving you time by doing all of the legwork on your behalf.

Sam Barr-Worsfold
Independent Protection Expert at Drewberry

Back to Top

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
 

What is Critical Illness Insurance?

Critical Illness Insurance may sound similar to Income Protection but in fact it’s very different. While Income Protection is designed to cover you for anything that medically prevents you from doing your job, Critical Illness Cover will only pay out if you’re diagnosed with a serious (i.e. critical) illness.

The three biggest claims on Critical Illness Cover are for cancer, heart attacks and strokes. Other reasons for claiming include multiple sclerosis (MS) and Parkinson’s disease.

get critical illness insurance advice from sam carr, independent protection expert at Drewberry

To claim on a Critical Illness policy, you have to be severely ill with a condition specified in the policy. Your policy may also detail the severity of the illness (e.g. excluding low-grade, in situ cancers).

This is compared to Income Protection, which will not only pay out for critical illnesses but also ‘minor’ conditions as long as they prevent you from doing your job.

Sam Carr
Independent Protection Expert at Drewberry

Typical Critical Illness Insurance policies cover up to 40 severe illnesses, but the best Critical Illness plans will provide protection against 120+ conditions.

Another major difference between Critical Illness Cover and Income Protection is that while Income Protection pays out a regular income (for as long as you need it if you’ve opted for long-term cover), Critical Illness Insurance only pays out once in a lump sum. This is typically used to repay a mortgage, so there may not be much left over to support day-to-day expenditure if you were too ill to work.

Josh martin, independent protection expert at drewberry, can help you compare income protection and critical illness cover

While Critical Illness Cover certainly has its place, particularly when combined with Life Insurance and used to protect a mortgage (see below), it’s not necessarily the best option to protect your income long-term.

When you choose a comprehensive, own occupation and long-term Income Protection policy, you’ll usually find it provides better salary insurance than Critical Illness Cover.

Josh Martin
Independent Protection Expert at Drewberry

Back to Top

 

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%
-
 

Income Protection or Critical Illness Cover?

Key Differences

Income Protection

Critical Illness Cover

Pays out a regular income

Pays out one cash lump sum

Covers a set proportion of your wages

Benefit can be as much as you require

Typically used to cover everyday expenses

Generally used to repay a mortgage or make home modifications

Can claim as many times as you need to and, with long-term cover, for as long as you need to

Can only claim once, then the policy terminates

Most common claims are musculoskeletal (e.g. back pain) and mental health (e.g. stress)

Three most common claims are for cancer, heart attacks and strokes

A couple would need two separate Income Protection policies

Critical Illness Cover can be taken out jointly with a partner along with Life Insurance

Benefit is usually, but not always, paid out after a deferred period

Benefit pays out once you’ve met the criteria for a claim

There are a number of key differences between Critical Illness Insurance and Income Protection. Which one is right for you depends on your circumstances, but if you’re trying to decide between the two we’d typically recommend Income Protection.

This is because it’s a more comprehensive cover. If you buy long-term, own occupation cover the policy will protect you right up until retirement if anything stops you from doing your specific job. Critical Illness Insurance only pays out on the diagnosis of a critical illness and only once, so it’s not always enough for everyone.

Samantha Haffenden-Angear
Independent Protection Expert at Drewberry

Back to Top

What is Life Insurance?

What is Life Insurance?

Life Insurance is designed to pay out a cash lump sum if you pass away during the term of the policy. There are two types of Life Insurance: Term Insurance (which is split into Decreasing Term and Level Term Life Insurance) and Whole of Life Cover.

Term Life Insurance

What does Life Insurance cover?
Term Insurance lasts for a set term and then ends. It’s the most common type of Life Insurance and is typically used to cover a mortgage. Decreasing Term Insurance is suited to straightforward repayment mortgages, where the amount owed falls over time. Here the amount you’re insured for falls alongside your outstanding mortgage balance.

Level Term Insurance is better for interest-only mortgages, where the outstanding mortgage balance remains fixed until the end of the mortgage term. It’s also used for family protection, so that you can ensure your loved ones will receive the same benefit if you die in year 1 of the policy as if you died in year 25.

Whole of Life Insurance

Whole of Life Insurance, on the other hand, is more used to cover inheritance tax liabilities or to pay for funeral costs and small debts. As you’re guaranteed a payout with Whole of Life Insurance (it lasts until you pass away, no matter when that may be), premiums are usually more expensive and payouts are much lower than for Term Insurance.

Joint Life Insurance

Couples with joint liabilities, such as a mortgage, often take out Joint Life Insurance. This covers two lives under one policy. These are typically written on a ‘joint life, first death’ basis, which means the policy pays out on the death of the first partner.

However, this means that after the death of the first partner, the entire policy is void. The second partner is left without any Life Insurance at all.

For this reason, it may be better to consider two single Life Insurance policies, one for each individual. This doesn’t usually cost much more than a Joint Life Insurance policy and you get two payouts, one on the death of each partner.

For a man aged 50, the risk of death by the age of 65 is 1 in 10.

Family Income Benefit

Family Income Benefit is another type of Life Insurance that pays out a regular income to your loved ones on your death rather than one cash lump sum. This can allow them to maintain their lifestyle and keep up with everyday expenses after you’re gone.

rauri taylor, independent protection expert at drewberry, can offer life insurance advice

Life Insurance is there to give both you and your loved ones peace of mind. It allows them to know that they’ll be taken care of financially after you pass away.

Families often use funds to repay a mortgage, allowing them to stay in the home even if they couldn’t keep up with the mortgage repayments without the deceased’s income. They may also simply use the funds to maintain their lifestyle or for other means.

Rauri Taylor
Independent Protection Expert at Drewberry

 

Life Insurance with Critical Illness Cover

With Term Insurance, it’s possible to ‘bolt on’ Critical Illness Insurance to offer a more comprehensive level of cover. Life Insurance with Critical Illness Insurance will not only pay out a cash lump sum if you pass away but also if you’re diagnosed with a critical illness.

A critical illness can deal just as large a financial blow to a family as a death, so many people find it useful to have both options included. A payout can be used to clear a mortgage or adapt the home to accommodate a disability.

It’s essential to remember that a Life and Critical Illness Insurance policy will only pay out once before terminating. So if you survive a critical illness, you’ll be left without any Life Insurance and may struggle to get sensibly-priced cover with your medical history.

Back to Top

Life Expectancy Calculator

Your Current Age
  years  
Risk of Death in next
  years  
Gender
verisign seal
We have designed this calculator using data from the Office for National Statistics to help you understand the risk of death during the term of your mortgage. Simply enter your details to find out...

Your Life Expectancy Results

 

Life Insurance with Critical Illness Cover and Income Protection

Life Insurance, Critical Illness Cover and Income Protection are the three mainstays of the UK protection market. But do you need all three policies to be adequately protected?

This depends entirely on your circumstances. Where Income Protection and Critical Illness Cover are compared like-for-like for income continuation, Drewberry would usually recommend Income Protection as it provides a more comprehensive and longer-term cover.

Do I need life insurance with critical illness cover and income protection?

However, in some circumstances it may make sense to run these schemes in parallel with each other, perhaps with a small critical illness policy to pay for modifications to a home in the event of a disability.

Income Protection doesn’t pay out a lump sum, so there would be no immediate payout if your home needed wheelchair ramps or an accessible bathroom, for instance.

Alternatively, if you don’t have Private Health Insurance you may want a cash lump sum from Critical Illness Insurance to pay for private medical treatment. This may particularly be so in the case of cancer, where often private healthcare providers offer access to new and novel cancer drugs not yet available on the NHS.

It’s very common for people to run Life Insurance alongside Income Protection, but there is no product on the market currently where this can be done as a single policy. You’d need two policies for this level of protection. Most UK Life Insurance providers, on the other hand, will allow you to add on Critical Illness Cover for an extra charge.

will martin, independent protection expert at drewberry, can explain the difference between income protection and critical illness

Whether or not it makes sense to run Life Insurance, Critical Illness Cover and Income Protection alongside each other depends on your circumstances. That’s why it pays to speak to an insurance expert who can talk through your needs to find not only the best insurance solution for you but also the most cost-effective.

Will Martin
Independent Protection Expert at Drewberry

Back to Top

Get Protection Insurance advice

Get Expert Life Insurance and Income Protection Advice

A financial expert such as one of the team here at Drewberry can assess your needs and steer you towards the best protection insurance for your circumstances. We can talk through your options and find you the best balance. Obviously having no protection at all isn’t ideal, but at the same time there’s little point over-insuring yourself and paying a great deal of money for too much cover.

Confused about your options? For Life Insurance, Critical Illness Cover and Income Protection quotes and advice, don’t hesitate to pop one of our advisers a call on 01273646484.

the team at drewberry can offer advice on life insurance with critical illness cover and income protection

To discuss your insurance needs, please don’t hesitate to pop us a call. We’re totally independent and have access to the entire UK market, so can look across the entire range of insurers to find the best deal.

What’s more, the team is trained to give you a high level of advice and support throughout the process so you can have the confidence to know you’ve made sensible decisions about your future.

Tom Conner
Director at Drewberry

Back to Top

Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Policy
Level of Cover
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 Mortgage Protection Insurance Questions

 
I am looking at taking out life insurance to protect my mortgage and wanted to know what mortgage term...
 
I have a joint mortgage with my wife but I earn considerably more than her so I only really need mortgage...
 
To take out a mortgage is it also compulsory for me to take out mortgage life insurance so the bank would...
 
I need life insurance for my mortgage but wasn’t sure what decreasing term life insurance means?...
REVIEWS
EXCELLENT
4.92 / 5 Average
1548 Reviews
R Steer
Overall Rating
Josh, Nick & Sam helped me set up PHI & Life insurance when I set up my own company. The application process wasn't straight forward due to my medical history, but the team made everything as simple as possible.
C Ash
Overall Rating
I have not started my health cover yet, bus so far the introduction has been very efficient and speedy.
G White
Overall Rating
Clear and concise information
D Muirhead
Overall Rating
Excellent personal service from Matthew Giles, made sure we received a tailor made quote that ideally suited our requirements as a family
S Walker
Overall Rating
Great service, independent advice, not pushy and very consultative. I would have no hesitation in recommending.