Increasing Income Protection Benefit
Amount of Cover
- No minimum monthly benefit. Driven by minimum premium.
- Maximum monthly benefit is £100,000 per annum (£8,333.33 per month) or for a houseperson £20,000 per annum (£1,666.67 per month).
- The amount of cover increases in line with changes in the Retail Price Index to help protect the cover against inflation.
- The minimum term allowed is 5 years (if over 45 when the policy starts).
- The maximum term allowed dependent on cessation age.
- The minimum age to take out a policy is 18.
- The minimum age at the end of the policy is 50.
- The maximum age for buying a policy is before their 60th birthday.
- Policy must end by their 70th birthday.
- Payable monthly or annually by Direct Debit.
- Deferred Period - This is the initial period when a client is unable to work when we do not pay benefit. They can choose for the deferred period to be either 4, 13, 26 or 52 weeks.
- Stepped Benefit - This may reduce premiums as there are two levels of benefit can be chosen with two different deferred periods. This first level of benefit can be set to a lower level with a deferred period that coincides with the reduction in sick pay from an employer. The second level of benefit is paid out at a later deferred period, when sick pay stops altogether. Not available with the Low Cost Option.
- Low Cost Option - This will reduce premiums as with this option the benefit for any individual claim is limited to 24 months. Multiple claims can be made. For a houseperson, after the monthly benefit has been paid for 24 months, which does not need to be consecutive, the policy will end. Low Cost Option is cheaper than full cover, but is not available with Stepped Benefit.
Benefits automatically included
- Changing your policy (Previously known as Guaranteed Insurability Option)
- Continuous Cover - Cover will continue if your client goes on maternity/paternity/adoption leave, becomes unemployed or goes on a career break.
- Hospitalisation Benefit - A payment of 1/30th of the benefit will be made for each additional night the client spends in hospital after staying there for 7 consecutive nights.
- Income Guarantee - If the client needs to make a claim, and their salary is lower than it was when they bought the product, the monthly benefit we pay will be based on the lower of £1,500 per month or the monthly benefit at the start of their policy. This could be made up of a combination of continuing income alongside the monthly benefit.
- Life Cover - If the insured person dies during the length of the plan, we'll pay out an amount equal to their annual premium, or 12 times the monthly premium.
- Linked Claims - If, on returning to work, the client becomes incapacitated within 12 months from the same or related cause, payment of the monthly benefit will resume immediately.
- Proportionate Benefit - If, following a claim, the client returns to work in a different job or a lower income, as a direct result of the illness or incapacity, an appropriately reduced monthly benefit will be payable.
- Waiver of Premium (WOP)
NHS Doctors, Nurses and Surgeons
If your client is employed by the NHS, as a doctor, nurse or surgeon – we can provide special terms for these individuals in order to match their sick pay structure should they come to claim within their first 5 years of employment with the NHS.
The plan should be set up on a stepped benefit basis with a 26 and 52 week deferred period split, this matches their sick pay structure after 5 completed years of service.
Should your client need to make a claim before completing 5 years service, we will be able to match their situation at the time and start paying the monthly benefit when their NHS sick pay reduces or stops.
This option should only be used to cover their earnings through the NHS for that specific employment and will not cover any additional earnings received from a private medical practice.
In the event of a claim your client should notify us of their illness/incapacity as soon as possible, so that we can obtain all the relevant and necessary evidence needed to support the claim.
We can only provide this offering if the policy has been set up with a stepped benefit of 26 and 52 weeks. Restrictions and limits relating to the maximum allowable benefit still apply.
Current NHS sick pay structure
- 1st year of service – 1 month full pay and 2 months half pay
- 2nd year of service – 2 months full pay and 2 months half pay
- 3rd year of service – 4 months full pay and 4 months half pay
- 4th and 5th years of service – 5 months full pay and 5 months half pay
- After completing 5 years of service – 6 months full pay and 6 months half pay
- Please see the Product Profiles link for full details of the benefits and limitations of the Income Protection Benefit policy - Product Profiles