Royal London Income Protection [REVIEW]

Who Are Royal London?

Royal London was founded in 1861 as a friendly society and went on to become a mutual society in 1908.

In 2014 it started to bring its various brands under one unified Royal London umbrella. As part of this, Bright Grey and its sister brand, Scottish Provident, were re-branded as Royal London at the end of 2015. Today, they operate solely beneath the Royal London banner.

It is now the UK’s largest mutual life, pensions and investment company, with £130 billion of funds under management and over 8 million policies in place.

Royal London Income Protection is great for high earners given the maximum monthly benefit of just over £20,000.

The policy also provides Fracture Cover as standard where many other insurers charge an additional premium.

Bradley Fedarb
Independent Protection Expert at Drewberry

Royal London’s Income Protection

Policy Overview

• Comprehensive Income Protection with in-built flexibility
• Offers features aimed at NHS medical professionals such as sabbatical cover and special deferred periods to match NHS sick pay
• Provides both short term and long term cover to suit different needs and budgets
• Comes with a range of additional benefits. This includes Helping Hand, that offers services such as support with heart attack recovery, speech and language therapy after a stroke, a second medical opinion service and complementary therapies to help manage symptoms or aid recovery.

What Does Royal London’s Income Protection Cover?

Royal London offers both Short Term Income Protection and Long Term Income Protection.

Short term cover offers protection at a cheaper price point. You choose to get a benefit for 1, 2 or 5 years in the event of a claim. Long term cover, meanwhile, pays out right up until your chosen policy cease age if you are unable to work ever again.

Key Policy Factors

Flexible Cover Options

Royal London offers both full term Income Protection and short term options which pay out for 1, 2 and 5 years at a cheaper price point. This flexibility means that you can tailor your policy to your specific needs and budget.

Minimum Benefit Guarantee

As with all insurers, Royal London bases your Income Protection benefit on your salary immediately before your claim. If your salary has fallen between taken out the cover and you becoming incapacitated, you may be entitled to a lower monthly benefit.

However, should your income fall to less than 55% of your pre-incapacity earnings, Royal London’s minimum benefit guarantee means it will still pay the lower of £1,500 a month or the amount of cover stated on your plan.

When offering Income Protection to doctors, Royal London increases this guaranteed benefit to £3,000.

Automatic Waiver of Premium

In the event of sickness, Royal London waives your premiums. This means should you be unable to work as a result of incapacity, or because of a terminal diagnosis (where you’ve been given less than 12 months to live), Royal London will cover your premiums.

Increasing / Indexed Cover Available

Royal London lets you increase your Income Protection benefit over time. You can do this either at a fixed rate (between 2% and 5%) or index-link your policy, so the rise in your benefit is linked to increases in the Retail Prices Index (RPI). When based on RPI, the increase is capped at 10% each year.

With increasing cover, whenever your benefit rises your premiums also increase to compensate by 1.2 times the rate of increase in your benefit.

Life Change / Guaranteed Insurability

Without additional medical evidence, Royal London lets you increase your cover by up to 50% of your original benefit or £10,000 a year. Eligible life changes include:

• Increase in salary
• Mortgage increase
• Marriage or civil partnership
• Divorce / dissolution of a civil partnership
• Childbirth or adoption.

If any of these changes occur you must inform Royal London within 6 months of it happening to make use of this option.

Additional Benefits

Sabbatical Cover for NHS Medical Professionals

If you are an NHS doctor, surgeon or other medical professional and choose to take a career break, Royal London continues to provide own occupation cover.

In the event of you needing to claim during that break, Royal London examines your earnings from the 12 months immediately prior to the commencement of the break to assess your level of benefit.

Sabbatical breaks can last no more than 12 months.

Special Deferred Period Arrangements for NHS Professionals

Royal London offers deferred periods which align with NHS sick pay arrangements. This means it starts paying out a proportion of your benefit when your NHS sick pay falls to half pay.

Then, after your NHS sick pay stops entirely, it begins paying out your full benefit.

This lets you set a deferred period of 52 weeks, significantly reducing premiums, even if your sick pay doesn’t actually match that as you haven’t yet completed 5 full years of NHS service.

Helping Hand

Helping Hand comes free as standard with Royal London Income Protection policies. It provides you and your immediate family with comprehensive support to help you through tragic life events, such as the diagnosis of a critical illness or the death of a loved one.

This benefit is provided by RedArc and is available from day one of your policy. As part of the service you get access to a dedicated nurse who will be on hand to provide tailored support specific to your needs, at time when you need it. It also provides access to:

• A second medical opinion service
• Health Hero – 24/7 GP access
• Thrive – app to help improve mental wellbeing
• Personal Activity Intelligence – track and monitor fitness levels
• TrackActiveMe – assess musculoskeletal problems and access physiotherapy advice and personalised exercises
• Support when recovering from a heart attack
• Speech and language therapy after a stroke
• Complementary therapies to help manage symptoms or help with recovery
• Access to legal and career helplines for independent advice on employment rights and support in getting back to work sooner.

Fracture Cover

If you suffer from one of the specified fractures in Royal London’s policy documents, you’ll get a lump sum benefit of up to £4,000.

You can claim for multiple fractures at once, up to the £4,000 limit. This benefit is restricted to two claims per year and doesn’t affect your main Income Protection cover.

Hospitalisation Benefit

If you need to stay in hospital for more than 6 consecutive nights, Royal London pays up to £100 per night for up to 90 nights during the life of the policy.

The benefit kicks in from the seventh consecutive night onwards and is subject to the hospitalisation not being due to a condition your policy excludes.

Back To Work Benefit

To help with the process of returning to work after a serious illness or accident, Royal London offers an additional ‘Back to Work’ benefit.

With short term policies, Royal London offers 25% of the last benefit payment 1 month after your return to work. For full term policies, this rises to 50%. Then, 2 months after returning to work, you’ll receive a further 10% of the last benefit for short term policies and 25% for full term policies.

Death Benefit

If the worst should happen and you die during the lifetime of your policy, Royal London pays a lump sum benefit equivalent to 12 times your monthly premium.

How Does It Compare?

Very High Maximum Benefit

Royal London covers 65% of the first £15,000 of your earnings and 55% of the remainder. This is lower than some other insurers, such as British Friendly and Shepherds Friendly, which both cover up to 70% of your earnings.

If you need to insure more than 55% of your earnings above £15,000, another insurer might therefore be more appropriate.

However, in cash terms, Royal London’s maximum benefit is just over £20,000 a month or £250,000 per year. This is one of the highest available on the market.

Special Features for NHS Medical Professionals

For doctors, surgeons, nurses, midwives and other medical professionals, Royal London’s Income Protection has a number of special features. These include:

• An enhanced minimum benefit guarantee — this is the lower of £3,000 per month or the amount of cover on the plan compared to the lower of £1,500 per month or the amount of cover on the plan for other workers
• Sabbatical cover — Royal London continues to offer cover on an own occupation basis if you take a sabbatical of 12 months or less and assesses your earnings if you need to claim while on sabbatical based on your income immediately before the sabbatical began
• NHS sick pay mirroring — start receiving part of your benefit as soon as your NHS sick pay drops to half pay, allowing you to set a 52 week deferred period and save money on premiums.

Wide Range of Free Additional Benefits

Royal London’s suite of additional benefits includes Helping Hand, which provides many services for those needing support through difficult life events, such as diagnosis of a serious illness or a bereavement.

Meanwhile, its fracture cover is free with the policy, something that some other insurers charge an additional monthly premium for.

Low Death Benefit

Many insurers offer a death benefit alongside Income Protection, paying a lump sum worth a multiple of your monthly benefit. However, Royal London’s death benefit is a multiple of your monthly premium, which will likely be notably lower than a multiple of your monthly benefit.

If a death benefit is particularly important to you, you may be better off with a different provider or taking out Life Insurance alongside your policy.

Short Term Cover Available

While most people want to ensure their Income Protection pays out in the long-term, i.e. until the plan ends / they retire, Royal London also offers policyholders a short-term option.

This pays out for 1, 2 or 5 years per claim. Opting for a short term cover option reduces premiums for those seeking cheaper Income Protection.

Minimum Entry Age

Royal London’s minimum entry age of 18 is generally the industry standard, but there are insurers that offer Income Protection to people from the age of 16 or 17 for those wanting cover from this age.

Self-Employed Fixed Payment Protection

If you are self-employed, Royal London lets you protect any fixed payments you are required to make alongside your wages. For example, this might include payments for services (e.g. insurance) or credit agreements (e.g. loans).

How Much Does Royal London Income Protection Cost?

To give you an estimate of how much you can expect to pay for Royal London Income Protection, we’ve provided example premiums based on varying ages below.

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

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

Get Royal London Income Protection Quotes & Expert Advice

When comparing Income Protection Insurance there are lots of points to consider, particularly if you are looking at taking out cover for the first time.

If you’re feeling a little unsure we have a team of experts on hand who can provide independent advice and help point you in the right direction.

If you already know what you are looking for you can compare quotes from the top UK providers using our price comparison tool here.

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