First, it's important to know that our current income protection insurance policy offers a maximum of your annual earned income before tax. For new policies, this is 60%.
When working out your annual earned income, we’ll take into account the last 12 months income when working out the maximum benefit we can pay you (employed and self-employed).
However, we understand income can fluctuate (especially self-employed) and as a result, there will be circumstances where we may consider averaging your income over a longer period of up to 36 months. This will need to be asked by you at the point of claim.
We'll check this when you claim and then take off other payments you may be getting, such as the payments from any other Income Protection, or accident and sickness policies that you may have. This is the maximum monthly claim amount we can pay you, although this is capped by the amount of cover you've chosen with your policy.
If your income does fluctuate, it may mean that the most we'll pay is less than your cover. We won’t refund any premiums, so it is important you check each year to make sure you're not over insured. If it is by less than 10%, we’ll ignore the overinsurance and we’ll pay the full amount you’re insured for. However, if it’s over 10% please contact us so we can look to reduce your cover, so you don’t end up paying for cover you can’t claim on.
We talk about how we work out the maximum amount of cover in a bit more detail in the relevant section of your policy conditions. You may be able to claim using the £1,500 benefit guarantee if your salary has dropped since you started your policy, your policy conditions will tell you if you have this feature included in your policy.
A financial adviser will help you choose the right level of cover at the start and help run through the policy with you.
The products we provide change over time. Existing policies may be different, so it's important you check your own policy conditions to know what you're covered for. If you have a policy with us and are unsure, or need a copy of your documents, please get in touch.