The monthly benefit at claim is calculated based on your client's earnings immediately before they are incapacitated, not their earnings at the start of the policy. This could mean that if their earnings go down, they may not receive what they originally asked for. To help protect your clients chosen monthly benefit that is selected at the start of the policy, we have introduced an Income Guarantee, included in the policy at no extra cost.
We'll base the Income Guarantee on the lower of £1,500 per month or the chosen monthly benefit at the start of the policy.
This could be made up a combination of continuing income alongside the monthly benefit provided by the policy. Continuing income received whilst incapacitated will be deducted from the chosen monthly benefit, or the maximum benefit calculated at the time of claim, whichever is greater. The monthly benefit payable will never be more than the monthly benefit as shown in Policy Booklet. If the chosen monthly benefit was more than £1,500 per month and the maximum monthly benefit at claim is less than £1,500 per month, any continuing income will be deducted from the Income Guarantee.
The monthly benefit payable will be re-assessed throughout the claim and adjusted to take into account any changes to continuing income, to ensure that if the continuing income reduces or comes to an end, the monthly benefit payable will increase to but not exceeding the monthly benefit or £1,500 per month, whichever is lower.
The Income Guarantee will not apply if the client is considered to be a houseperson, working less than 16 hours per week, are not in paid employment, or are not working at the time of the claim.
If we reduce the monthly benefit payable at claim, we won't refund any of your client's premiums. Therefore it is important that your client reviews their policy regularly to ensure it meets their needs.
Income Guarantee Working Example - Scenario 1
Income Guarantee Working Example - Scenario 2