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IP too expensive?
How to scale down the cost to meet your client's budget

Income Protection

Why Income Protection?

The size of the prize

Recommending income protection can take up valuable time, especially if you need to invest in positioning the need and justifying the cost. But, for many advisers, recommending income protection is as important as critical illness and life insurance.

Examples of the commission you could receive

Policy

Client

Initial indemnity amount

£1,000 a month cover
LV= Income Protection (level)
£17.73 monthly premium

  • 28-year-old
  • retiring 65
  • 12-month waiting period
  • non-smoker

£345.11

£1,250 a month cover
LV= Personal Sick Pay (specialist income protection, guaranteed future prices)
£51.02 initial monthly premium

  • 25-year-old
  • retiring 65
  • 0 day waiting period
  • non-smoker

£851.21

£1,500 a month cover
LV= Income Protection (level)
£43.84 monthly premium

  • 30-year-old
  • retiring 65
  • 2 month waiting period
  • non-smoker

£853.52

Quotes correct as at June 2017. Commission based on our standard rates.

And your client?

Your client will be protected against the biggest financial risk they’re exposed to: being out of work for two months or more because of an accident or illness. If sickness does strike, they’ll be able to maintain the home and lifestyle they've worked hard for and can concentrate on getting better.

Income Protection vs. Critical Illness

In an ideal world, income protection and critical illness should be recommended together, as each product protects your client against a different risk.

The benefit paid under a critical illness claim can pay off a mortgage (or other debt) but what about your client’s ongoing commitments, like utility bills and other regular outgoings? And don’t forget, they don’t have to be diagnosed with a certain condition to receive their income protection pay-out.

What about the cost?

Income protection is typically more expensive because your client is far more likely to suffer a less serious condition, like back problems or stress.

Skiing downhill?

If income protection and critical illness combined is too expensive for your client, there are ways to bring down the cost:

  • Recommend income protection with a reduced benefit payment period (sometimes called budget income protection)
  • Suggest decreasing critical illness cover
  • Reducing the income protection benefit
  • Suggest a longer waiting period (income protection)

Menu plans

Some providers offer menu plans, which include various protection products bulked together at a reduced price.

0800 678 1890

TextDirect: first dial 18001

8.30am - 6.30pm Monday - Friday

We may record and/or monitor calls for training and audit purposes.

Watch our Income Protection video

Income Protection enhancements video thumbnail

Watch our short video that summarises the exciting changes we've made to our Income Protection product.


Literature

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Flexible Protection Plan

Why not add Life cover or Critical Illness to your client's plan for a wider protection portfolio?

More about Flexible Protection Plan

A person

Tools and Calculators

Everything you need to support your Income Protection recommendations.

Income Protection tools and support

Medical bag icon

Personal Sick Pay

Income protection for clients in riskier jobs who can be more expensive to insure.

More on Personal Sick Pay

Team of people

Large Case Team

If your client wants cover for more than £5,000 a month, we can offer dedicated support.

More about our Large Case Team

FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK