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Income Protection: Death benefit

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We’ll pay a fixed lump sum if your client dies before the end of their Income Protection policy. Unlike some other products in the market, our death benefit is part of our contract (it’s not ‘discretionary’ or an ‘optional extra’), making it easier for you to explain how our cover works. The amount we’ll pay depends on when your client took out their policy:

  1. We’ll pay £5,000 if your client dies within four years of the policy start date, or
  2. £10,000 if your client dies four or more years after the policy start date.

The lump sum will be paid to the policyholder and will form part of their estate for tax purposes. This means the money may be subject to inheritance tax under current legislation, depending on their personal circumstances.

If your client has multiple Income Protection policies with us, we’ll only pay a maximum of £10,000, irrespective of how many policies held.

Client Scenarios

Client scenario

Examples of how our death benefit works:

1) Sam took out a new LV= FPP Income Protection and then five years later was diagnosed with cancer. He’s unable to work and we are paying him £1,500 a month under his Income Protection policy.

Six months later, Sam sadly dies due to his illness. His spouse, Melissa, writes to inform us of his death and sends us the death certificate. We stop paying the £1,500 monthly benefit and pay his estate a £10,000 death benefit.


2) Louise took out a new LV= FPP Income Protection and then three years later she passed away. Louise was not claiming on her Income Protection policy at the time of her death. Her spouse, Carl, contacts us to cancel her policy and informs us of her death. We advised Carl that once we receive her death certificate we will pay her estate a £5,000 death benefit.

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Contact us about Income Protection

Quotes and questions: 0800 678 1890
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FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK