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

Income Protection

The different Income Protection products available

Although the concept of income protection is simple, there are various types of product in the market.

Traditional Income Protection - for clients in less risky jobs

Think office workers or professional occupations (such as accountants) where the risk of occupational injury or illness is low. The price doesn’t increase with age and the insurance keeps paying out until your client is well enough to go back to work – no matter how long it takes.

This is our standard Income Protection.

Specialist Income Protection – for clients in riskier jobs

Aimed at clients in riskier jobs who are more expensive to insure, like construction workers, nurses, teachers and the self-employed. The price increases with age (‘age-banded’ or ‘age-costed’ premiums) making it more affordable for many clients. This type of product is often referred to as 'manual income protection'.

This is our Personal Sick Pay.


Income Protection options

Our Income Protection has a number of options to suit your client needs' as shown below.

Level Income Protection cover

  • The amount of cover is fixed and won't change
  • It won't keep up with inflation and will buy less in the future

Inflation-linked Income Protection cover

  • The amount of cover and premium go up (each year) in line with inflation. The premium goes up by inflation multiplied by 1.5
  • We use the Retail Prices Index (RPI)

Budget Income Protection

  • The maximum claim period is 24 months and your client's policy will continue (we won't cancel it after a claim has been paid unless you're a homemaker)
  • Premiums will be cheaper than full Income Protection

Types of premiums

Our Income Protection supports both reviewable and guaranteed premiums. The differences are explained below.

Guaranteed premiums

  • Your client's premium is fixed and won't change unless they choose inflation-linked cover
  • If inflation-linked cover is chosen then the amount of cover goes up in line with inflation (RPI). However the premium will increase by inflation multiplied by 1.5

Reviewable premiums

  • The premiums won't change for the first five years and then they can be reviewed every year, based on a number of assumptions
  • Once we've reviewed a premium we guarantee we won't change it again for 12 months

Coffee

Read our easy-to-understand, jargon free guide to Income Protection (IP) and find out what's in it for you and your client.

If you're unsure that the product is right for your client, you can speak to our adviser support team on 0800 678 1890 or email us at [email protected] and we'll be happy to help. Our lines are open from 9am to 5.30pm Monday to Friday.

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.

Literature

Personal Sick Pay

Find out more about our Personal Sick Pay product; income protection for clients in riskier jobs.

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