Written in collaboration with Reassured Advice
Securing income protection insurance can offer very important protection if you have dependents who rely on you financially or if you are the breadwinner in your household (your monthly income is keeping you afloat).
Some employers may offer a form of income protection as an employee benefit, you can find out if you receive this by checking your employment contract.
In this article, leading insurance broker, Reassured Advice, compare income protection policies from leading UK insurers to help you find your best option, as each insurer will offer different policy terms and features.
What is income protection?
Income protection is a type of insurance policy that provides you with a percentage (up to 70%) of your regular income whilst you have stopped working due to illness or an injury.
You would typically receive regular payments until you retire or are able to return to work, taking away a significant amount of the financial burden.
Why is it important to compare quotes?
By comparing quotes, you can find one at an affordable price and a policy that will most likely fit all of your needs. There are many ways to compare quotes when looking for your perfect income protection policy.
We have chosen Aviva, Royal London, AIG and British Friendly to compare income protection polices because they have some of the best benefits and pay out percentages on the market, as well as being highly rated and trusted by customers.
| Insurer name | Policy name |
| Aviva | Income Protection+Living Costs Protection |
| Royal London | Personal Menu Plan |
| AIG | YourLife Plan |
| British Friendly Society | Protect Breathing Space |
It is important to consider what coverage you want in place to determine the policy that best suits you, for example, how much your bills, mortgage payments and childcare costs are.
Below are some key comparisons you may wish to consider when securing income protection:
Pay out percentage comparison
Whilst you will not get paid your full monthly income, insurers offer to pay out a percentage of it, this could be up to 70%.
| Aviva | Royal London | AIG | British Friendly |
| Up to 65% of the first £60,000 you earn, plus 45% on earnings above £60,000 (Income Protection+) Or Benefit choice between £500 – £1,500 (Living Costs Protection) | Up to 65% of the first £15,000 of your pre-tax earnings and up to 55% on the remainder up to a maximum of £150,000 per year | Up to 60% of your pre-tax earnings up to £30,000, plus 55% for earnings between £30,000 – £100,000 and 45% of any annual income exceeding £100,000 | Up to 65% of the first £60,000 of your earnings, plus 45% on earnings over £60,000. |
Payment period and policy term options
A policy term is how long the policy will last and a payment period is how long you’ll receive payments for when making a claim.
| Aviva | Royal London | AIG | British Friendly | |
| Policy term | (Both policies) 5-52 years or until you’re 71 | 5-52 years or until you are 70 | 5-53 years or until you are 70 | (Both policies) 5 – any time before you turn 70 |
| Payment period options | Living Costs Protection Short term payment period up to a maximum of 12 months Income Protection+ short term payment max of 24 months Or long term payment period up until the policy ends (full-term) | Short-term payment period (max of 1, 2 years or 5 years per claim) or Long-term payment period (lasts until your policy expires) | Limited term up to 24 months or Full term cover | Short term (which can last for either for 1, 2 or 5 years per claim) Or Long term/full term (pays out until the policy term finishes) |
It is worth noting that the costs of the policy will vary depending on the policy term and the payment period options. It can be helpful to ask what these different costs look like so you can make a comprehensive decision on what policy would be best for you and your family.
Maximum monthly benefit
This is the maximum amount that could be paid out by each insurer.
| Aviva | Royal London | AIG | British Friendly |
| £20,000 per month | £250,000 per year | £20,833 per month | £4,750 per month |
Policy benefits
The majority of income protection policies usually offer a number of helpful features. This can make policies appealing for customers to choose them. We have chosen a benefit from each insurer:
| Aviva | Royal London | AIG | British Friendly |
| ‘Aviva Digicare+’ – a free app that you can use for health and wellness support (including annual health checks, nutrition and mental health support, free Bupa anytime line, bereavement support and a digital GP). | ‘Helping hand’ – a service provided to help you with your wellbeing. You will have access to 24/7 virtual GP consultations, as well as, also including a variety of apps to help you with physical and mental health. | Death benefit (something not all insurers offer) – where your loved ones are provided with a lump sum payment if you pass away during the policy term, which depending on inheritance tax, could be up to £10,000. | Inflation linked cover – this gives you the option to choose an increasing cover amount. Meaning your benefit amount will increase with the retail prices index (RPI), helping to protect you from inflation prices. Your premiums will also increase in line with your new cover amount. |
Policy ratings
Expert ratings taken from Defaqto, a reliable source to help you understand the quality of policies.
| Aviva | Royal London | AIG | British Friendly |
| 5 stars | 5 stars | 5 stars | 5 stars |
How to conduct an income protection comparison
Insurers offer different benefits, policies and prices. It is important to compare multiple policies as you will need to find one suited to your requirements.
There are many ways to look for quotes, some options being: using a comparison website, running the research independently (direct with the insurer) or using a broker.
Why not use this helpful income protection insurance calculator to calculate how much cover protection you need?
By enlisting the help of a broker can save you time and money by comparing multiple quotes at once. This can be the best way to secure the right policy to meet your needs, at the best available price.
