Best income protection insurance

Length of policy

Typically, when taking out income protection insurance, you’ll need to choose whether you want to be covered on a short or long term basis.

Short-term income protection may be better suited to those on a strict budget who want some form of protection in place, as premiums tend to be cheaper due to the shorter pay out period (typically a maximum of up to two years).

Whereas long-term cover may be better suited to those who’re self-employed as you can choose to be covered up until retirement age, thus providing cover for your whole working life.

Why not use Reassured Advice for a short vs long term income protection comparison?

Definition of incapacity

You’ll then need to choose a definition of incapacity. This will define what you can and can’t make a claim for. Your options include:

• Own occupation - You’ll be able to make a claim if you’re unable to perform your own occupation. You won’t be asked to do any other job
• Suited tasks (or suited occupation) - You may be asked to carry out another job that suits your skills and experience if you are unable to do your own. To make a claim you must be unable to do both your own occupation or any other suited occupations
• Any occupation - You’ll only be able to make a claim if you’re unable to work in any occupation. This means you may be asked to work in a different job role

An ‘own occupation’ definition can often be considered the best as, for most, it’s the most straightforward definition for making a claim.

However, there are some instances where an own occupation definition may not be suitable.

For example, those with high-risk occupations may struggle to secure a policy with this definition due to the risk involved with their job. Therefore, the best definition for them may be a suited tasks or any occupation policy.

Reassured Advice can secure you a policy with an own occupation, suited tasks or any occupation definition of incapacity - whatever most meets your needs.

Length of deferred period

The deferred period (or waiting period) refers to the period of time in between your first sick day and when you’d like your payments to begin.

You’ll have the ability to choose the length of your deferred period at the point of application.

How long you wish your deferred period to be will depend on your personal circumstances.

For example, if you receive sick pay from an employer, you may want your income protection payments to start when your sick pay comes to an end. Whereas, if you don’t receive sick pay you’ll likely want your payments to start sooner.

What type of policy you have may also influence how long your deferred period is, as some short term policies may allow a deferred period as short as one day. Whereas some long term policies have a minimum deferred period of four weeks.

Premium payment type

You’ll also have the ability to choose how you’d like to pay for your premiums. The most common premium payment options include:

• Guaranteed - These are premiums that remain the same throughout the lifetime of your policy
• Reviewable - These are premiums that are subject to change over time at the discretion of the provider
• Age-banded - These are premiums that increase each year as you age

Guaranteed premiums can often be classed as the ‘best option’, as you’ll never have to pay any more for your monthly premium than originally stated.

However, if you’re a smoker, reviewable or age-banded premiums may be more favourable as your smoking habit may not always be factored into the price you pay.

• Your age
• Your occupation
• Smoking status
• Your health and wellbeing
• Lifestyle (any high-risk hobbies)