How can you find the best income protection insurance…
As a leading organisation both in the UK and overseas, AIG has become one of the world’s biggest income protection providers.
Income protection is a policy designed to pay a percentage of your income if you’re too ill or injured to work.
But how does AIG income protection insurance compare to its competitors?
This article will answer your queries and help you understand whether AIG income protection is right for you.
You can compare AIG income protection with other providers through Reassured Advice.
Why not use the services of Reassured Advice to compare AIG income protection with all the UK’s best income protection providers.
Their whole of market comparison service allows you to find the best policy to meet your specific needs, at the right price for your budget.
This AIG income protection review page includes:
AIG (also known as American International Group) are a multinational finance and insurance company who employ nearly 50,000 people.
Established in 1919, and embracing international expansion early, AIG have expanded into a company who now serve customers in more than 80 different countries.
Their UK branch, known as AIG Life Limited, work in the UK, Channel Islands, Isle of Man and Gibraltar. They have over 60 years of experience and around 8 million customers within the UK market.
AIG Life have a 5 star rating for their Yourlife plan income protection, and 52% of customers rate them “Excellent” on Trustpilot.
Income protection is a type of insurance designed to pay a sum assured to a policy holder who is either too injured or ill to work.
In this situation, a capped percentage of your monthly salary is paid out, helping replace lost earnings. Income protection policies can be short-term or long-term, depending on the type of policy, and the criteria you would like to cover.
An income protection policy has a deferral period which can last between 4 weeks and 12 months, but can vary depending on the provider. A deferral period is essentially the time you will wait between making a successful claim and receiving your first payment.
If you’re worried about an illness or injury preventing you from earning your monthly wage, then income protection can be an attractive policy.
Income protection is valuable to anyone working. However, it can be really beneficial to those who are self-employed and do not have traditional sick pay, as well as those without savings.
However, if you’re unsure how you would financially survive without your salary, then income protection is worth considering.
AIG’s income protection is known as a Yourlife plan and offer the following income protection benefits:
|Policy benefits||What it does||Length/Amount|
|Guaranteed benefit||If your income fluctuates during the policy’s term, a sum assured can be guaranteed in your term||Up to £1,500|
|Free cover during underwriting||If you become ill or injured during the period where your premiums and level of risk are decided by the insurer, you will still be covered||Up to £25,000 per annum|
|Rehabilitation support||Helps your recovery, ensuring you can get healthier||Support recovery during and after the deferred period|
|Trauma benefit||Pays a sum of money if you suffer from either a life changing illness or injury that meets one of AIG’s definitions||6 months benefit amount, capped at £50,000|
|Hospitalisation benefit||Covers you if you’re incapacitated and have to spend more than 6 nights in hospital during the deferred period||£100 for each subsequent night during the deferred period, capped at 90 days|
|Family carer benefit||Covers your partner or child if they suffer from an illness/injury that affect their daily activities (under AIG terms and conditions)||After three months or incapacity, either £1500 or the guaranteed benefit (depending on which of these is lower|
|Death benefit||A sum assured if you pass away during the policy’s term||£10,000 - Subject to inheritance tax|
|Terminal illness||If you have been diagnosed with a condition leaving you with 12 months or less to live, you will receive an advanced payment||12 months of benefit amount (policy can be enhanced to avoid the deferred period)|
|Recuperation benefit||Helps to aid in your recovery||Capped at 3 months of your benefit amount|
|Proportionate benefit||Provides a portion of your benefit amount if you return to work mid-month.||Included|
To ensure you have the cover that your personal circumstances require, it’s important to check AIG’s terms and conditions.
Alternatively, you can contact Reassured Advice and the friendly team will be happy to walk you through any queries, or find you a no-obligation, fee-free quote.
The following conditions can vary, depending on when a policy is take out and by who:
Length of policy - Policies can be taken by UK, Channel Islands, Isle of Man and Gibraltar residents aged between 17 - 54 years old.
The length of a policy can be anywhere between 5 - 53 years and you can have a policy ongoing after 54 years old. However, the policy’s cover must end before your 70th birthday.
Deferred period - The income protection deferred period is the length chosen by you to determine the period between a successful claim and receiving your first claim.
AIG deferred periods are 4, 8, 13, 26 and 52 weeks.
Premiums - Premiums (the monthly payments you pay for the policy) are dependent on the above information, plus key factors about your personal circumstances, including your medical history, occupation, and smoking status.
Premiums are fixed for policies unless you amend your level of cover.
Types of cover - You can choose either a full payment term, or limited payment term policy with AIG.
Full payment terms cover every successful claim and monthly payment until you return to work. Limited payment terms pay successful claims for a maximum of 24 months and are a short-term income protection insurance.
More claims can be made within the policy’s term but only if you have been working for 26 weeks between claims.
The amount of cover - If you’re currently in paid work, you can take cover up to 60% of your pre-taxed income up to £30,000. If you earn between £30,000 - £100,000 annually, an additional 55% of your pre-taxed income within this amount is included, as well as 45% of your pre-tax annual income over £100,000.
This amount is divided by 12 to show the maximum amount you would be eligible for.
For example, if your annual income is £38,000, pre-taxed you'll be entitled to up to the following:
The monthly benefit is capped at £20,833 for those in paid work and £1,667 per month for those who aren’t. If you’re working at least 16 hours a week when you make a successful claim, but you would usually earn more than £1,500 per month with the above calculation, then you will receive a guaranteed income protection of £1,500 per month regardless.
The monthly benefit is fixed for level term policies unless you amend your level of cover. For increasing cover, your monthly benefit can increase up to a maximum of 10% a year in line with RPI (Retail price index).
Reassured Advice can help compare AIG income protection quotes, so why not get in contact?
AIG offer group income protection, designed to cover 3 or more people if someone is incapacitated due to illness or injury. This is primarily designed for businesses and their employees.
The policy offers an employee up to 80% of their salary, including employee pension contributions if a successful claim is made, and has a payment period which ranges from 2 years to when the policy ends.
Essentially, group income protection is aimed at businesses and those seeking solo income protection would not be applicable.
Group income protection is not something Reassured Advice currently offer. However, we can compare AIG and other competitor income protection policies.
The length of your income protection is determined by the following:
While there isn’t an exhaustive list of what AIG income protection insurance covers, the following are key aspects that are or aren’t covered:
|Terminal illness||Pre-existing illnesses|
|Incapacitation through an illness or injury (under AIG’s terms and conditions)||Self-inflicted injuries|
|If you’re signed off work by a medical professional||Injuries caused by alcohol or drug abuse|
There’s no universal answer for how much income protection someone needs or how much does income protection cost. The amount required depends on your personal situation and circumstances.
Ideally you want the highest monthly sum assured for the most affordable premium. However, there are a list of things to consider covering when choosing income protection.
There are several factors that can impact your income protection cover and amount. These include:
Smart Health is a non-contractual benefit included with AIG income protection policies. It’s offered through AIG by Teladoc Health and is designed to provide access to health and wellbeing experts 24 hours a day, 365 days a year.
It offers six services to both AIG policy holders, their partners, and their children (up to 21 years old). You can access this through a phone number and an active policy:
If you take out income protection cover with AIG, you have the right to cancel through them at any time.
Within the first 30 days from when you receive your cover information, you can cancel directly with AIG. AIG will refund any premiums you have paid - providing no benefit has been claimed.
If you cancel after this period, your cancellation will take effect from the day before your next premium date. This also ensures that no additional premiums will be collected for the policy.
AIG will not refund any monthly premiums paid, though you may be entitled to a partial refund if paying through annual premiums.
Does income protection cover redundancy?
No, income protection insurance for redundancy is not something AIG offers.
Is income protection taxable?
For UK residents, any income protection benefit paid is usually free from income tax and capital gains tax.
Those who receive a benefit while outside of the UK may be required to pay tax under that country’s laws and regulations.
In the UK, this is subject to law and regulation changes by the government, which AIG, or an income protection broker like Reassured Advice, can't be held responsible for.
What is the maximum income protection benefit?
Your income protection benefit will be capped at 60% of the first £30,000 of your pre-taxed income, followed by 55% of pre-taxed income between £30,000 - £100,000 and 45% of pre-taxed income over £100,000.
Payments are capped at £20,833 per month for those who are employed for a minimum of 16 hours a week before a successful claim.
For those who were unemployed before taking a policy, the maximum amount of cover is £1,667 per month.
Can I have two income protection policies?
You can have as many income protection policies as you want. However, the income protection benefit will still be capped.
This means that regardless of how many policies you have, you will only get a maximum of 60% of your monthly income. Policies cannot be stacked to pay out more.
Is stress covered under income protection?
Stress on its own would not be covered under your income protection. However, any mental health issues or physical illnesses which have been caused by stress and is not a pre-existing condition has the potential to be covered - providing it’s within AIG’s terms and conditions.
Does income protection cover reduced hours?
If you have an incapacity which results in you being unable to work your full hours, you will still be entitled to income protection.
If you were entitled to over £1,500 per month income protection, based on your salary, but would now be calculated at receiving a lower amount due to being unable to work your full hours, you will either be entitled to £1,500 per month or your benefit amount, depending on which is greater.
If your hours are reduced not through an incapacity issue, then this is not covered.
Which is better life insurance or income protection?
Neither product is better than the other. The benefits of these policies are dependent on your personal circumstances and requirements. However, one may be more beneficial to your situation than the other.
You can contact Reassured for life insurance policy information and Reassured Advice for additional income protection information.
We'll be able to answer any queries to help you decide which policy is best for your circumstances.
For more information read our dedicated article comparing income protection vs life insurance policies »
You can contact AIG through the following:
Reassured Advice offer a whole of market comparison service, meaning you can compare quotes from all the leading UK providers.
Using this service can ensure you find the best and most affordable policy for your situation. Reassured Advice’s broker service is FCA-regulated, and any quotes given are fee-free, personalised and no obligation.
Quotes start from as little as 20p-a-day ‡ . Get in touch with a friendly member of the team to start your journey today.
All information is taken from AIG’s website and the information contained is subject to change at any time by AIG. Information is correct as of 07 July 2022
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