income protection
Choosing the right income protection
Fact-checked and reviewed by Kiruba Shankar Eswaran or another licensed agent on our team. Read our editorial standards.
This guide is for general educational purposes and is not financial advice. Cover, eligibility and terms vary by insurer and by policy. Always read the policy documents for the full terms, limitations and exclusions before you buy.
When you start looking, bear in mind that everybody’s circumstances are different. The kind of things that determine how a policy needs to work are:
You’re not tied into an income protection policy in the same way you might be with mortgages and personal loans, but it’s nevertheless important to set up your policy in the way that works best for you.
It’s impossible to be definitive, because insurance policies are designed according to each company’s under-writing criteria. In layperson’s terms that means how they assess the risk they’re taking in order to cover you. Most policies will offer:
There are three basic types:
• ‘Own occupation’ pays out if you have to stop your usual job.
• ‘Suited occupation’ pays out if you can’t do your usual job or another one suited to your experience.
• ‘Any occupation’ pays out if there’s no job you’re fit enough to do.
Choose a policy that allows you to increase or decrease your premiums, change your level of cover and take what’s called a ‘career break’, which allows you to freeze the policy and the premiums for a limited period.
If you get ill or injured and have to stop working you’ll want it to be as easy as possible to claim your benefit.
• Can you do it all online?
• Are you able to speak to someone for help?
• How much paperwork, such as doctors’ certificates, do you have to provide?
You have little or no control over how, when and how often you fall ill or get injured. Look for policies that don’t put a limit on the number of claims you can make, either in a year or during the entire term of the policy. No matter how many claims you make, it shouldn’t ever change the way your cover works.
Insurance companies are authorised and regulated by the Financial Conduct Authority. They should also be part of the Financial Services Compensation Scheme which means you may be compensated if the company is unable to fulfil its obligations to you.
Most insurance companies provide free extras as part of the package, often called ‘enhanced benefits’. Eleos policies come with these extras as standard:
• 24/7 access to a remote GP from anywhere in the world;
• Cashback on every purchase you make with some of the biggest brands
Regulatory requirements insist on insurers providing the majority of the details listed above - The extras listed here are optional. Eleos provides them all.
Customise your policy to suit your budget and your needs
The insurance industry is very well regulated in order to protect the customer. However, some companies and their agents might have their own ways of doing certain things. Here are a couple of things you might be concerned about:
You won’t encounter cancellation fees in any income protection policy.
The majority of companies that arrange insurance will be paid by the insurer for setting up your policy. However, some may charge you an arrangement fee for the trouble instead of or as well as their commission. While it's a legitimate business practice, it's by no means a requirement to getting your income insured.
Insurance companies have a responsibility to be upfront and transparent about their terms and promises, and they're regulated to ensure they deliver on this. Intermediaries that arrange your insurance policies for you, however, are free to offer their services to you in any way they wish to. If an intermediary asks you to sign an agreement, it is your responsibility to check it for clauses that you might disagree with.
While there’s nothing illegitimate about what we’ve drawn your attention to here, it’s one of the reasons why we started Eleos. We believe that customers shouldn't have to keep an eye out for the unexpected. We won’t be surprising you with any of the points we’ve listed.
This is for your sake. If you’ve told your insurer something that isn’t true, either by accident or on purpose, the insurer might refuse a claim or even cancel your insurance.
It’s in your interest to tell your insurer if there are any significant changes in your occupation or earnings because they could affect your cover and what you could claim.
Changes to your health and lifestyle don't have any impact on policies that are medically underwritten before being accepted, but if you keep your insurer informed they might be able to offer assistance you’re otherwise unaware of. Eleos’s discretionary benefit of remote GPs is a good example.
You're not tied in to any form of financial protection, nor are you required to keep the cover the same for any length of time. Income protection policies are flexible because your circumstances might change at any point.
Income protection insurance policies can be set up in many different ways in order to protect people regardless of their circumstances. Not only are the plans flexible when you set them up, they're flexible throughout, so you’re free to adjust and amend them at any time.
Most applicants are not automatically asked for medical evidence. Under age 30, all five UK insurers reviewed for this guide will consider up to £1 million of life cover with no automatic medical evidence based on age and cover amount alone. The amount falls as you get older, and by 75 it can be as low as £25,000 at one insurer and £100,000 at another.
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