The best income protection insurance policies in the UK
We explore the best income protection insurance policies and companies in the UK in our handy guide.
If you're considering getting income protection insurance, there's much you should know beforehand, including how it works and who the best providers are.
Summary
- Income protection insurance pays you a monthly benefit if you cannot work due to a medical reason.
- There are several types of income protection to consider.
- There is no one-size-fits-all approach to income protection, so it's best to compare different policies.
- For support and guidance, consider seeking advice from an insurance broker.
What is income protection insurance?
Income protection insurance pays you a monthly benefit if you cannot work for medical reasons.
This means if you are ill or suffer from injury that prevents you from working, you’ll still receive a regular income.
When you apply for your policy you will be able to choose how much benefit you would like to receive. The maximum is likely to be between 50-70% of your salary. However, as payments are tax-free this shouldn’t be a problem for most people.
You also get to decide how long you will need to wait before benefits are paid after you have stopped working - this is referred to as your deferred period.
Both the size of your monthly benefits and the length of your deferred period have a significant impact on the cost of your insurance.
The lower the monthly income you request and the longer you’re willing to wait before you get paid, the cheaper your income protection will be.
What are the different types of income protection?
There are several types of income protection to consider if you’re thinking about taking out a policy:
- Short-term income protection: where benefits are payable for between one and five years.
- Long-term income protection: where benefits are payable until you are fit enough to work again, or retire.
- Own occupation income protection: benefits are payable when you can’t do your own job, rather than when you can’t work in any position.
- Suited occupation income protection: covers you if you can’t work in your field.
Some policies will have a guaranteed premium that doesn’t change, while others will have a reviewable premium that may change over time.
The eight best income protection insurance providers in the UK
According to our research, with corroboration from Defaqto, these are eight of the best income protection providers in the UK, along with their Trustpilot rating (scored out of 5).
1. Aviva Life & Pensions UK (Trustpilot 4/5)
2. British Friendly Society (Trustpilot 3.9/5)
3. LV= (Trustpilot 4.4/5)
4. Royal London (Trustpilot (4.1/5)
5. Shepherds Friendly Society (Trustpilot 4.3/5)
6. Vitality (Trustpilot 4.2/5)
7. Wesleyan Assurance Society (Trustpilot 4.8/5)
8. Zurich (Trustpilot 4/5)
The 8 best income protection policies in the UK compared
Ratings can help you choose an income protection policy. However, there is no ‘one-size-fits-all’ approach to income protection. What may suit you might not suit someone else.
This makes it difficult to define the ‘best’ policy.
Instead, we explore and compare some of the income protection insurance policy details for the providers outlined above.
Provider | Maximum benefit by income percentage | Details | 2023 claim payout rate |
---|---|---|---|
Aviva Life & Pensions UK Limited | 65% up to £60,000, 45% over £60,000 | Cover can be for five years or full term; benefits can be deferred by four, eight, 13 or 26 weeks. | 92.5% |
British Friendly Society | 65% up to £60,000, 45% over £60,000 | Cover can be for one, two or five years or full term; benefits can be deferred by one, four, eight, 13, 26 or 52 weeks. | 89% |
LV= | 60% | Cover can be for at least five years or full term; benefits can be deferred by four, eight, 13, 26 or 52 weeks. | 92% |
Royal London | 65% up to £15,000, 55% of the remainder | Cover can be for one, two or five years or full term; benefits can be deferred by four, eight, 13, 26 or 52 weeks. | 99% |
Shepherds Friendly Society | Up to 70% | Cover can be for one or two years or full term; benefits can be deferred by one, four, eight, 13, 26 or 52 weeks. | 96.2% (2022) |
Vitality | Up to 60% | Cover can be for one or two years or full term; benefits can deferred by four, eight, 13, 26 or 52 weeks. | 95.4% |
Wesleyan Assurance Society | 60% up to £40,000, 55% for £40,000-£110,000, 50% for over £110,000 | Cover can be for two or five years or full term; benefits can be deferred by zero, two, four, eight, 13, 26 or 52 weeks | 97% |
Zurich | Up to 80% | Cover can be for two years or full term; benefits can be deferred by four, eight, 13, 26, 52 or 104 weeks | 85% (2022) |
While using an insurance broker does not guarantee better rates, the potential for cost savings and more favourable terms is a compelling reason for many to engage with a broker.
The combination of market knowledge, negotiation skills, and access to multiple insurers allows brokers to secure competitive rates tailored to their clients' needs.
Learn more: can insurance brokers get better rates?
How to find the best income protection cover
Many income protection insurance options are available, but when choosing, you have to consider all your options and choose the best one for you.
If you want to get some guidance in making this decision, you may want to consider seeking advice from a financial expert.
Unbiased can help you find an insurance broker who can quickly help you find an income protection policy that suits your needs.
:quality(20))