Low cost Income Protection Insurance

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How to Save Money on Income Protection Premiums

Low cost income protection options can be an affordable way of protecting your income if you are unable to work due to ill health.

There are two ways to have low cost income protection insurance, Stepped benefit's and limited claims period.

Stepped Benefit

With some providers such as Legal & General you can have an income protection policy that provides a lower income after the initially deferment period with a larger benefit being paid after a second deferment period.

This can work well for someone who's employer pays say 50% sick pay for the first 6 months of illness or some one who receives fully pay for 3 months and half pay for three months.

Limited Claim Period

A standard income protection insurance can potentially pay you a benefit for the full term of the policy if you are unable to work as a result of illness or accident. With a budget income protection plan this is limited to a maximum of two years.

This reduces the risk to the insurance company and hence reduces the premium payable which could save you as much as 64% when compared with a standard policy. Below are some example premiums for LV's budget policy compared to their standard income protection plan.

Here are examples of how budget income protection can help when cost is an issue.

Example premiums	Income protection	Budget income protection
Male, 35, non-smoker, rate class 1, 6 month waiting period, guaranteed rates, £1,000 benefit a month, inflation linked, expiry age 65	£18.11 a month	£8.02 a month
		Saving 44%
Female, 30, smoker, rate class 1, 12 month waiting period, guaranteed rates, £1,000 benefit a month, inflation linked, expiry age 65	£30.64 a month	£12.22 a month
		Saving 39%
Source Webline 16/06/2016

Below is an over view of LV's standard income protection compared with their budget option.

	Income protection	Budget income protection
Own occupation cover For 78% of occupations we cover, we offer ‘own occupation’ cover. This means that your clients are protected if they’re unable to do their own job, rather than one they may be suited to do.
Salary limits Your clients can select a monthly amount of cover up to 55% of their income (before tax).
Cover to age 70 To apply, your clients must be aged between 17 and 59 years. However for 94% of all occupations that we cover, cover can continue right up to age 70.
Guaranteed Premiums Can help your clients plan, so they know how much they will always pay.
No standard exclusions LV= has no standard exclusions.
Choice of waiting periods All occupations we cover, have a choice of a 1,2,3,6, 12 or 24 month waiting period.
Inflation-linked cover We simply increase the premium and cover by the rate of inflation each year (using the Retail Prices Index).
Review of three years income for self-employed We’ll take into account an income averaged over the last three years.
£1,000 benefit guarantee When your client claims, we guarantee that no matter what their income is, they’ll receive at least £1,000 a month (or if they chose cover of less than £1,000 then the amount they chose). Please see the policy summary for terms and conditions.
Career break option We’ll provide cover up to a maximum of £1,500 a month (plus inflation linked increases that may apply).
Maximum Claim Duration	Unlimited Until the end of the plan or when the maximum age is reached, or whichever is sooner.	Maximum 2 years Policy holders can make as many claims of up to 2 years in duration as they need to, providing that they have returned to work for a minimum of 6 months between each claim. Homemakers will receive a monthly benefit for up to a maximum of two years for any single claim. If we have paid a single claim to a homemaker for two years, the policy will stop.

Source LV 06/2016

Legal & Gernal Low Cost Option

This option provides a way of keeping the cost of your premiums down. If you meet the definition of incapacity they will pay benefit for up to a total of five years, including any time payments are made under the Hospitalisation benefit. After the benefit has been paid for five years, your policy will end.

There are other providers who’s products may be more suitable to your needs. For independent protection advice call us on 0845 262 2226.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600