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Low Cost Income Protection Insurance
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 or Female, 35, non-smoker, rate class 1, 6 month waiting period, guaranteed rates, £1,000 benefit a month, inflation linked, expiry age 65 |
£11.75 a month |
£5.65 a month |
Saving 52% | ||
Female or Male, 30, smoker, rate class 1, 6 month waiting period, guaranteed rates, £1,000 benefit a month, inflation linked, expiry age 65 |
£13.67 a month |
£6.63 a month |
Saving 51% | ||
Source Webline 23/06/2023 |
Below is an over view of LV's standard income protection compared with their budget option.
Income protection | Budget Income Protection | |
---|---|---|
Own occupation cover |
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Salary limits |
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Cover to age 70 |
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Guaranteed Premiums |
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No standard exclusions |
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Choice of waiting periods |
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Inflation-linked cover |
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Review of three years income for self-employed |
||
£1,500 benefit guarantee |
||
Career break option |
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Maximum Claim Duration |
Unlimited |
Maximum 2 years |
Source LV 06/2023
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 01603 271108.
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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