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An income protection policy will pay out in the event you become too ill or injured to work.
The monthly payments you receive can help you keep up to date with essential financial commitments, such as mortgage/rental costs and household bills, while you focus on recovering.
Why not compare income protection quotes using the fee-free service offered by Reassured Advice?
A friendly member of the team can help you find the best policy for your personal circumstances.
You’ll also be able to compare quotes from the whole of the market with prices starting from just 20p-a-day ‡ .
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Income protection won’t pay out the full sum of your income, instead it will pay out a percentage of your usual pre-tax earnings.
There are a variety of providers on the market, who will offer to pay out a different percentage of your income. Typically, this is between 50% - 70%.
The table below shows some popular providers and the maximum percentage of your income they could pay out:
|Up to 65%|
|Up to 65%|
|Up to 65%|
|Up to 60%|
|Up to 60%|
This information mentioned above has been taken from each providers website and is correct as of 16/05/23
Comparing quotes can allow you to find the best policy to meet your needs. Simply contact Reassured Advice today for your personalised, no-obligation and fee-free quotes.
Income protection could pay out to you every month for a couple of years or until you reach retirement.
How long your policy will pay out to you is known as a ‘payment period’ and this can be long-term or short-term.
What payment period you opt for will ultimately depend on your personal needs.
If you’re eligible to receive sick pay from an employer or are on a strict budget, a short-term payment period could be sufficient to provide some form of cover.
However, if you have the budget and don’t receive financial aid, a long-term policy could help to provide peace of mind that you can still receive an income to support your loved ones even if you’re unable to work again.
Reassured Advice can provide you with information about all of your options to help you find your ideal policy.
A friendly member of the team can take you through a full long-term vs short-term income protection comparison.
No, income protection pays out for injury and illness. Therefore, a pay out won’t be made if you pass away.
Some policies may include what’s known as a ‘death benefit’ which will provide a lump sum payment to your loved ones if you pass away during the policy term.
This will typically be a set amount decided by the provider (for example £10,000) or a multiple of your benefit amount.
Not all providers will offer this benefit.
Compare income protection quotes from the whole of the marketing using Reassured Advice, including providers who offer a death benefit.
If you’re looking for protection that could pay out to your loved ones after your passing, why not consider a life insurance policy?
Read our complete income protection vs life insurance page to find out more »
An income protection policy won’t pay out straight away, you’ll need to wait for a deferred period to pass before any payments are made.
The deferred period will be agreed during the application process. The options may vary between providers, but the following are commonly available:
You must still be unable to work once this period has passed in order for payments to commence.
If you recover and are able to return to work before the deferred period has come to an end, no payments will be made.
When setting your deferred period you may wish to consider any other savings or income available to you and how long this is likely to last you.
For example, if you receive sick pay, you may wish to have your deferred period line up with when your sick pay schedule comes to an end.
Whereas, if you don’t receive sick pay (such as the self-employed), a shorter deferred period could be more beneficial to prevent you having to dip into your own savings.
No, an income protection policy will pay out in monthly, tax-free, instalments.
This is to mimic an income to help you keep up with monthly financial commitments, such as:
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Most commonly, income protection payments aren’t backdated.
The payments from an income protection policy will commence once the deferred period has ended and will cease once you return to work, your payment period comes to an end or your policy expires.
However, it can be possible to secure what’s known as ‘back-to-day-one’ cover which will backdate your payments to the first day you were unable to work.
Not all providers will offer back-to-day-one cover.
The maximum amount that can be paid out is up to 70% of your usual income.
Providers may also have a maximum sum they will pay out.
For example, Royal London will cover up to 65% of the first £15,000 of your pre-tax earnings and 55% of the remainder up to a maximum of £250,000 per year.
The policy terms and conditions can vary significantly between the different providers, making comparing quotes essential in finding the right cover to meet your needs.
Reassured Advice can help you compare quotes from all major UK providers, allowing you to find the policy with the most favourable terms.
There are some instances in which an income protection policy won’t pay out, including:
1. The illness/injury doesn’t meet the policy’s definition of incapacity.
A definition of incapacity helps to outline what makes you eligible to make a claim. For example:
Most policies will have an ‘own occupation’ definition of incapacity, which is the most straightforward and comprehensive definition.
In this instance, if your condition doesn’t prevent you from doing your job, a claim won’t be accepted and no payments will be made.
In 2022, leading provider Aviva declined 1.5% of claims due to policy conditions not being met.
2. Non-disclosure is discovered:
In 2022, Aviva declined 2.8% of new claims due to the customer misrepresenting relevant health and lifestyle information.
Providing incorrect details or withholding certain information from your provider is known as non-disclosure.
If non-disclosure is discovered when it comes to making a claim, any payments will be declined.
3. The condition isn’t covered:
An income protection policy won’t cover any conditions that are self-inflicted or that are as a result of alcohol/substance abuse.
It could also be possible to have any pre-existing medical conditions added as exclusions to your policy, this means you won’t be able to make a claim for this reason.
Income protection won’t protect you against any form of unemployment (including redundancy).
In 2021, 86% of all income protection claims were paid out, totalling £734,677,000.
The table below shows 9 of the UK’s leading income protection providers and their most recent pay out statistics:
|Provider||Pay out rate|
The information displayed above has been taken from each providers website and is correct as of 16/05/23
Reassured Advice can help you compare quotes from all of the above providers, simply get in touch today to find the best income protection for your needs.
Income protection can be beneficial if you don’t receive sick pay, don’t have your own savings or are just worried about the financial repercussions of being unable to work.
The monthly payments you receive could prevent you from falling on hard times, having to borrow money from others or having to make cutbacks to your life.
There are a range of policy options available, such as long-term or short-term cover, to meet a range of needs and budgets.
If you’re unsure whether income protection is right for you and your loved ones, why not contact an expert?
An experienced broker, such as Reassured Advice, can help to provide you with all the information you need and answer any questions.
Find the right income protection pay out to meet your needs by comparing multiple quotes.
By comparing quotes through Reassured Advice you can find the provider who offers to pay out the greatest percentage of your income.
A friendly member of the team can also help you through the application and answer any questions you may have along the way.
Quotes through their fee-free service start from just 20p-a-day, so why not get in touch?
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