What benefit amount is right for me?
You'll need to choose the monthly benefit that’s right for you. The most we'll cover is 65% of your gross monthly income (This is your total monthly earnings before tax and National Insurance contributions and this must not be more than £3000). For many people this is not far off their usual take-home pay.
Your gross monthly income can also include commission, dividends and bonus payments, which are a regular feature of your income, but not any other payments, such as overtime, car allowances, expenses or any investment income.
The example below shows you how this calculation works if you're an employee or a contract worker:
Mr Summers has an annual salary of £25,000.
He can work out his maximum monthly benefit as follows:
£25,000 / 12 = £2,083.33 (This is Mr Summers' gross monthly income.)
65% of £2,083.33 = £1,354.16 (This is the maximum monthly benefit he can cover.)
Or, Mr Summers should be able to find his gross monthly income on his payslip.
If you're self-employed, you'll need to check your income over the last 12 months. For example, you could do this by looking at your latest tax returns or by checking this with your accountant. You can then use this figure to work out the maximum benefit you can cover.
To understand how our Lifestyle Cover policy could help you, please click below on the type of employment which applies to you.
To help you understand how Lifestyle Cover insurance works, we’ve provided an overview of what is and isn't covered.