How can you find the best income protection insurance…
Income protection pays out a percentage of your net income in the event you’re unable to work due to accident or sickness.
The amount paid out (your benefit amount) can vary between providers but it’ll typically be between 50 - 70% of your usual income.
How much cover you need will depend on what essential monthly outgoings you have.
Commonly this includes:
Whatever your typical income would cover can be covered by income protection payments.
Because everyone has different needs and circumstances, working out your level of cover isn’t a ‘one size fits all’ scenario and no two quotes will be the same.
By using our income protection insurance calculator below you can input your monthly expenses to find the amount of cover you require:
Alternatively, the team at Reassured Advice can help you to determine the best income protection solution to meet your needs.
Simply get in touch for your free income protection quotes.
Typically, insurers will cover 50 - 70% of your income, but exactly how much you’re offered will vary depending on your personal circumstances.
This is because providers will work out your benefit amount using your income before tax, or net income if you’re self-employed.
For example, if your usual annual income (before tax) is £30,000 and your policy pays out at 70%, you could receive £1,750 a month.
If you were off work for 24 months and your policy covered this entire period, that would be £42,000 in payments overall.
You’ll also be asked about any other sources of income you have, this could be from:
These extra sources of finance will likely then be deducted when determining your maximum benefit amount.
By using a broker service (like Reassured Advice) you’ll have help through the whole application process, from discovering your level of cover to comparing quotes and finding the best deal.
You’ll need to pay a monthly premium to keep your cover in place.
The price you pay will be calculated using both personal factors as well as factors about your policy.
These factors include:
Let’s investigate each of the factors that will influence the price you pay…
You’ll be asked to provide your age and date of birth during the application process.
In most cases, the older you are the more you’ll pay for your premium.
This is because as you get older, your health can become less favourable (and a claim more likely).
Taking out cover at a younger age can help you to lock in a more affordable premium price.
You’ll also be required to provide information about your health and medical history.
Income protection will cover you for any illnesses or injuries that aren’t pre-existing, meaning you can make a claim for any new illness or injury that occurs during your working life.
If you have any pre-existing medical conditions these will be taken into consideration and often there’ll be an exclusion for this condition (and sometimes related conditions) written into your policy.
This means you won’t be able to make a claim if you can’t work due to your pre-existing condition.
In rare circumstances, those with extremely poor health may be declined cover altogether as insurers may deem you as too high risk.
Even if you’ve previously struggled to secure income protection, using a broker like Reassured Advice can help you compare quotes not just from major providers but also smaller specialists who may be more likely to offer cover.
You’ll be asked to declare your smoking status as part of the application process.
If you declare yourself as a smoker you may need to undergo some additional questioning so the insurer can find out more about your smoking habits.
While not all providers will charge smokers more for their premiums, it’s highly likely due to the associated health risks.
It’s important that you are completely truthful about your smoking habits, failure to tell the truth on your application is known as non-disclosure and is this a form of insurance fraud.
It can also lead to your policy becoming void when it comes down to making a claim and your investment will be wasted.
It’s still completely possible to secure affordable cover as a smoker, let Reassured Advice help you find the most cost-effective policy.
Your occupation is something that can have an influence on the price you pay for income protection.
Most providers will use ‘class groups’ to determine how risky your occupation is.
Usually, this means the riskier the occupation, the higher the class group and the higher the premium paid.
It’s worth noting that class groups can vary significantly between providers and some providers may not split occupations into class groups at all.
This makes comparing quotes even more essential to find the provider who’ll offer you the most favourable terms.
Why not let Reassured Advice do this on your behalf?
Your level of cover refers to the pay out amount you’ll receive each month, also known as your benefit amount.
The amount you receive will be up to 70% of your usual income and can be used to cover all the expenses your usual income would cover.
Reassured Advice can take you through the whole application process, from determining your level of cover to comparing quotes from all of the UK’s leading providers.
When taking out income protection, you can choose between:
Both policy types will cover you against accident and sickness.
The main difference between the two is how long your payment period can be.
As the name suggests, short-term income protection offers a shorter payment period than long-term income protection, often with a maximum of up to 2 years.
Whereas with long-term income protection you could continue to receive payments up until retirement age, providing cover for the rest of your working life.
Reassured Advice can compare both short-term and long-term income protection to help you determine the best option.
Incapacity refers to the inability to do something, in this instance it refers to the inability to work.
At the point of application, you’ll be able to choose the level of incapacity you’d like to be covered for, you can choose between:
Own occupation - An own occupation policy provides the most comprehensive cover as you’ll be eligible to claim if you cannot fulfill your specific job role.
Suited tasks - A suited tasks policy will allow you to claim if you cannot fulfil your specific job role or any other roles that meet your skills and experience.
This means if you’re too ill or injured to carry out your daily tasks you may be asked to take on another role where you’re able to carry out the tasks.
Any tasks - An any tasks policy can be hard to claim on as the definition of incapacity often requires total disability for a claim to be accepted.
You can only make a claim if you can’t carry out any work at all and can’t complete day-to-day tasks such as signing your name.
The more comprehensive your cover is, the more you’ll pay for your premium.
So, if you choose an ‘own occupation’ definition of incapacity then you’ll pay more than an ‘any tasks’ definition due to the higher level of cover this definition provides.
Whether you choose a short-term or long-term policy will help you to choose the length of your pay out period.
Your pay out period is the length of time you’d like to receive pay outs for.
With a short-term policy your pay out period can typically be a maximum of 2 years (although this can vary between providers).
Due to the shorter payment period, short-term income protection options tend to be cheaper than long-term.
With a long-term policy, you have the flexibility to choose a much longer payment period and can even have your cover last all the way up until retirement so you’re protected for the rest of your working life.
Reassured Advice can compare both short-term and long-term income protection to help you find the option that meets all of your needs.
The deferred period refers to how long you are off work before you can make a claim.
For those who benefit from full sick pay, or have their own savings to fall back on, you may be able to stretch your deferred period for some time and benefit from cheaper premiums.
For those who are self-employed or don’t receive sick pay from an employer, you may wish your deferred period to end sooner rather than later so you’re not left struggling financially.
We have written a dedicated income protection for self-employed workers article if you require more information »
How long (or short) you need your deferred period to be will ultimately be down to you and your personal financial circumstances. Although some providers have a minimum deferred period of 4 weeks.
The table below shows the breakdown of the overall benefit you could receive for a monthly premium of £5.
These quotes are based on a benefit amount until age 65.
|Age||Monthly pay out amount||Deferred period||Premium payment terms|
|30||£1,530||3 months||Reviewable and age banded|
|35||£1,182||3 months||Reviewable and age banded|
|40||£875||3 months||Reviewable and age banded|
|45||£604||3 months||Reviewable and age banded|
|50||£396||3 months||Reviewable and age banded|
|55||£270||3 months||Reviewable and age banded|
Income protection quotes are subject to individual status, occupation and medical underwriting so may differ from the prices shown
Compare income protection from all of the UK's leading providers through Reassured Advice to find the most cost-effective cover option.
As outlined in this article, quotes can not only vary between providers but also due to your own personal circumstances.
Comparing income protection quotes is essential in ensuring you secure the best available deal.
What’s more, letting a broker (like Reassured Advice) do this on your behalf allows you to compare quotes from all of the UK’s leading providers.
So why not let Reassured Advice help you secure a policy that meets all of your needs?
Quotes are no obligation and fee-free and start from just 20p-a-day.
Simply get in touch with a friendly member of the team.
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