Aegon Income Protection Insurance [REVIEW]

Who Are Aegon?

Aegon was founded as Scottish Equitable in 1831 in Edinburgh and is still headquartered in the city. Dutch insurer Aegon N.V. bought a 40% stake in Scottish Equitable in 1994 and became a 100% stakeholder in 1998.

Scottish Equitable rebranded as Aegon Scottish Equitable in 2006 before shortening the name to Aegon in 2009.

Today, Aegon has 3.9 million customers in the UK, is a global provider of protection products, pensions and asset management and operates in 20 countries worldwide.

Aegon offers a good Income Protection proposition with some useful additional benefits.

However, it’s generally more suited to workers in lower risk occupations due to Aegon applying the ‘activities of daily living’ definition to many higher-risk roles.

Josh Martin
Independent Protection Expert at Drewberry

Aegon’s Income Protection

Policy Overview

• Comprehensive Income Protection with a number of policy options available
• Offers a wide range of benefits to choose from and the option of additional flexibility and changes that can be made as necessary
• Choice of benefit payment periods, with either 2 years or full term to the policy end date.

What Does Aegon’s Income Protection Cover?

Key Benefits

Rehabilitation and Proportionate benefit

If you have own occupation cover, fall ill and then return to your role in a reduced capacity earning less, or start a different job where you earn less, Aegon will pay a reduced benefit amount to top up your lower income.

Lump Sum Death Payment

Aegon will pay a single lump sum payment of £5,000 to your loved ones if you die while Aegon is paying an Income Protection claim.

Automatic Waiver of Premium

In the event of a claim, Aegon automatically includes a waiver of premium. This means they pay your policy premiums for you as soon as you receive your first monthly benefit. Should you recover and return to work, you will have to pay premiums once again.

Income Promise / Benefit Guarantee

Aegon, like all insurers, bases your monthly Income Protection benefit on your income.

If your income falls between you taking out the policy and making a claim, you will therefore be entitled to a smaller benefit. However, Aegon’s income promise means that, if your salary falls after you take out a policy, it will pay you a minimum income.

If your benefit is £1,500 a month or less, Aegon will still pay your chosen monthly benefit in full, minus any continuing income you’re receiving. If your benefit is more than £1,500 per month, Aegon performs calculations based on your new salary.

Indexed Cover Available

Aegon offers optional index-linked Income Protection. If you choose this, your benefit amount will increase with inflation based on the Retail Price Index (RPI), up to a maximum increase of 10% per year.

Your premiums will also increase each year at 1.5 times the increase in the RPI.

Life Change / Guaranteed Insurability

When a policy is taken out on standard premiums and terms, Aegon will offer you the chance to increase your cover by up 50% of the monthly benefit or £12,000 a year without additional medical evidence for the following major life events:

• Birth / adoption of a child
• Marriage or registered civil partnership
• Promotion / salary increase
• Divorce / dissolution of a civil partnership
• Increase in mortgage due to a new home, home improvement or extension.

Additional Benefits

Policy Plus

Available to you and your immediate family, Policy Plus offers a range of support services for no additional cost throughout the life of your policy.

Health And Wellbeing Service

Aegon’s health and wellbeing service, provided by Health Assured, offers you access to a range of confidential support services. These offer guidance on a variety of issues including:

• Loss of a family member or friend
• Diagnosis of a medical condition
• Emotional issues
• Marital and relationship concerns
• Family concerns, for example childcare
• Work-related concerns
• Consumer rights, legal and debt issues.

Available 24/7, 365 days a year, you can speak with Health Assured’s qualified and experienced counsellors over the phone or via the dedicated Health Assured online hub.

Second Medical Opinion

Should you be diagnosed with a serious health condition, you can have a confidential face-to-face consultation with a UK-based specialist to review your diagnosis via Aegon’s second medical opinion service RedArc.

Key Comparison Points

Daily Work Activities Definition

Aegon is mainly geared up to cover low-risk clients in professional roles, such as office workers. For most workers, it offers the own occupation definition of incapacity. This means if you find yourself unable to do your specific job role, Aegon will pay out.

However, for those roles Aegon deems riskier, such as ones involving manual work, it will typically only offer the daily work activities definition. To claim on this definition, you must be unable to do at least three of the following activities:

• Walk 200 metres without stopping without assistance of another person
• Climb up and down a flight of twelve stairs while using a handrail and with a rest permitted
• Bend to get in or out of a car or to pick up a small object off the floor without the assistance of another person
• Communication — hear conversational speech in a quiet room, with a hearing aid if necessary; understand simple messages; speak with enough clarity to be understood
• Read a daily newspaper or pass a driving eye test exam (with use of glasses if necessary)
• Use your hands and fingers to communicate with a pen, pencil or keyboard
• Independently make arrangement to see a medical professional or take regularly prescribed medication
• Ability to recognise the transactional value of money and handle routine financial transactions such as paying bills.

There are many other insurers on the market that do cover manual workers with a much better definition of incapacity, including on an own occupation basis in some cases.

Maximum Cover

Aegon covers up to 55% of a policyholder’s pre-incapacity earnings, which is lower than many other insurers. For example, British Friendly and Shepherds Friendly both offer a maximum of 70% of earnings. Therefore, if you need to insure more than 55% of your earnings, another insurer might be more appropriate.

Aegon also caps the policy benefit at a maximum of £150,000 per year. While this should be fine for most people, there are insurers who offer larger benefits for higher earners.

Guaranteed Benefit

Aegon’s Income Protection offers a guaranteed benefit. This means that the monthly payout will never be less than £1,500 or your chosen benefit. This might be useful if your income falls in the period between you taking out the policy and making a claim.

Limited Additional Benefits

While Aegon does offer some free services along with the policy, such as Policy Plus, these are more limited than some other providers in the market.

Deduction Of State Benefits With Maximum Income

If you’re insured for the maximum benefit Aegon allows based on your income, Aegon takes into account state benefits and deducts them from your monthly payout. This is to ensure you’re not receiving more in income than Aegon’s maximum allowable monthly payout.

Shortest Deferred Period is 4 Weeks

Aegon’s shortest deferred period is 4 weeks.

Other insurers offer deferred periods of 1 week or even 1 day. If you need a shorter deferred period, perhaps because you don’t get much sick pay and have little in the way of savings, another insurer may be a better option.

How Much Does Aegon Income Protection Cost?

To help provide you with an idea of how much Aegon Income Protection can cost, we’ve provided example premiums based on varying ages below.

To calculate these quotes we have assumed that the individual looking for cover wants a monthly benefit of £1,250 and:

• Wants a 4 week deferred period
• Is in a low risk office based role
• Has no pre-existing conditions
• Is a non-smoker.

Compare Income Protection Quotes & Get Expert Advice

As you can see, there are a lot of points to consider when comparing insurers. With so many factors in play, it can be time-consuming to pull up key information across every single insurer in the market, so why not ask an adviser for help?

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.

• There is no fee for our service
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• You’ll speak to a dedicated expert from start to finish
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• Claims support when you need it most.
• We are authorised and regulated by the Financial Conduct Authority. You can find us on the financial services register here 🧐

For help and fee-free advice on Income Protection, please don’t hesitate to get in touch. You can reach us on 02084327333 or email help@drewberry.co.uk.