Income Protection

With a deferred period of 4 weeks or less, clients should notify us of a claim within 2 weeks of their Date First Absent (DFA). For all other deferred periods, clients should contact us within 4 weeks.

The deferred period will start from the date the client became incapacitated.
However, this can’t be more than four weeks before the date the client first contacted us to make a claim.

Generally, we will look to backdate the claim to the end of the deferred period, subject to receiving the relevant medical information needed to support the claim from that point. We must also be satisfied that the late notification has not extended the period of absence, particularly where early intervention may have changed the outcome.

A client’s income is what they earn from being in paid employment or self-employment while working more than 16 hours per week.

Income if employed

Income includes earnings before tax, any bonuses or commission and the value of any taxable benefits. 

We’ll use payslips or any other HMRC documents (such as P60, P11D) to confirm values. We assess the total income in the 12 months before the client became incapacitated.

We include any dividends received during the 12 months that represent the client’s share of net profit and that they wouldn’t receive if incapacitated.

Income if self-employed

Income will be the share of the business’s yearly taxable profits. We won’t count any HMRC‑allowable business expenses as part of their income.

If the client has been self-employed for over three years, we’ll use their average yearly income for the three years before they became incapacitated. If the client has been self-employed for less than three years, we’ll use their average yearly income during the period before they became incapacitated.

We’ll need to see tax returns or business accounts to confirm.

If a bonus, commission, allowances or tronc payment is passed through PAYE and therefore subject to tax which is declared to HMRC, it can be included as evidence and used when calculating the maximum benefit.

A Director's income would be treated as either employed or self-employed depending on their official status.

Income if self-employed

Income will be the client’s share of the business’s yearly taxable profits. We won’t count any expenses from running the business that are allowed by HMRC guidance as part of their income.

If they’ve been self-employed for over three years, we’ll use their average yearly income for the three years before they became incapacitated. 
If they’ve been self-employed for less than three years, we’ll use their average yearly income during the period before they became incapacitated.

We’ll need to see tax returns or business accounts.

Contractors must determine if their workers are employed or self-employed. A worker may be self-employed in one contract and employed under the next. Being registered as a CIS subcontractor doesn't mean that they will automatically be self-employed for all work in the construction industry.

Yes, income from multiple roles can be covered under one personal IP application.
The financials are assessed at claim stage and providing the insured income still continues to support the chosen benefit then the other income should not be deducted from the claim.

Currently we do not deduct State Benefits where a client is in receipt at claims stage. However if they are in receipt of a monthly pension settled on an IHER basis as a result of their claimable event, this will be deducted from their entitlement.

Please note: The monthly benefit we pay might affect their claim for some means-tested state benefits.

Subject to any additional income a client may be in receipt of, and the level of sick pay they are in receipt, they would still be entitled to benefit. For clients receiving layered sick pay, stepped deferred periods should be considered.

Where a client has a claimable event beyond the end of the deferred period and then return to work on reduced hours because of their ongoing health limitations, we can support them with proportional benefit. Details of this can be found within the current terms and conditions under “Proportionate benefit if you earn less when you return to work.”

None. As long as all disclosures are made at application, the client doesn't need to make any disclosures once the policy has commenced. If for any reason the client feels they have misrepresented at application stage, they should notify us.
For IP, we would suggest reviewing the cover annually to ensure the cover amount is right, as it could mean the client would be over or under insured in the event of a claim.

If the client’s needs change, they can ask us to amend their cover. We might need them to answer some questions about their current circumstances, including health and lifestyle. Sometimes, the information given about their health or lifestyle might mean we can’t make the changes asked for.
If we need to give the client a new policy so we can make the change, it may have different terms & conditions. The premium will be based on the rates available when the new policy is issued. We’ll speak with the client before making any changes.

We assess each client based on their disclosure, condition, and its type and severity, using evidence-based data to support all underwriting decisions. Around 80% of cases get a decision at point of sale, and we aim to offer cover wherever possible. We continually review our underwriting approach to improve the client journey and extend cover to more clients.

If a client does not have evidence of the income to support the indexed benefit, then we would reduce the benefit at claim.

Executive IP is designed to pay a monthly benefit to the business in the event of a valid claim. This can be used to fund the employees ongoing sick pay so they can meet their financial commitments whilst not leaving them to rely solely on their savings or state benefit.