Claiming on an income protection policy

Income protection is a policy that allows you to make a claim if you’re unable to work due to illness or injury.

You could receive up to 70% of your usual income (depending on the provider), paid out monthly, to help you cover essential living costs.

Like most other financial protection policies, you’ll need to contact your provider to start the claims process.

It’s likely you’ll be sent a claims form, which you’ll need to complete and send back to your provider.

Reassured are an FCA-regulated broker, who can help you compare income protection quotes from the whole of the market - allowing you to find the right policy to meet your needs, at the best available price.

While you can’t claim on your policy through Reassured, a friendly member of the team can help to answer any questions you might have when the time comes.

Income protection through Reassured starts from just 20p-a-day ‡ , so why not get in touch?

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Income protection claims statistics

In 2023, 81.3% of all new income protection claims were paid out (from 17,361 claims), totalling £810,000,000 (with an average of £22,270 paid out per claim)[1].

The table below shows some of the UK’s leading income protection providers and their 2023 claim statistics:

ProviderPercentage of claims paidTotal value of claims
LV= 92%£17.2 million
The Exeter Insurer Logo 96%£11.3 million
Royal London review logo 99% (of all claims)£6.5 million
Aviva 92.5%£53 million
Legal & General 80%£3.6 million

This information has been taken from the most up to date claims statistics on each providers website and is correct as of 20/11/24

Claims statistics can help to give an indication of how likely a provider is to pay out and can also help to understand:

  • How many claims were paid out
  • How much was paid out in claims
  • How many claims weren’t able to be paid
  • Most common reasons for claiming

When determining the best income protection insurance for you, you may wish to consider these statistics in your decision.

However, ultimately, the right provider for you will be the one that offers the terms and conditions to meet your needs, at the best available price.

Why not compare income protection quotes through Reassured?

A friendly member of the team can help you compare quotes from all of the above providers (plus more), free of charge.

What does income protection cover?

Income protection can cover you for any illness or injury that meets your definition of incapacity and leaves you unable to work.

There won’t be a specified list of conditions within your policy, meaning you can be covered for a wide range of illnesses and injuries.

The monthly payments received from income protection could help you to cover:

Re payment mortgage house

Mortgage payments
Childcare cost baby

Childcare costs
Cover rent cost

Monthly rent payments
Icons transport

Transportation costs
Bills utilities

Household bills & utilities
Leisure

Leisure/hobby costs
Family living

Family living costs
Debts

Monthly debt/loan payments

We have a complete what does income protection cover article for more information »

How much income protection do you need?

What pay out amount do you need to help cover essential monthly living costs if you were unable to work? Simply enter your commitments to find out.

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£723 a month is the average monthly mortgage payment in the UK, with the average monthly rental price coming in at £700.

The majority of our monthly income will go towards rental or mortgage payments.

For this reason, it’s essential to have precautions in place to ensure you could keep up to date with your payments if you weren’t receiving your usual income.

Monthly income protection payments can help to cover this large expense and ensure you can stay in your home.
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According to the Money Advice Service, the average household spends £340 a month on household bills.

This includes electricity, gas, TV and broadband.
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Childcare costs are on the rise with it now costing £137.69 per week for part-time nursery for a child under the age of two.

That’s over £550 per month - is this an amount you’d be able to keep up with if you were unable to work?

Becoming ill could also result in the need for additional childcare while you attend doctors’ appointments or medical treatment.
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The average household in the UK spends around £97 a week on their food shop, totaling £388 a month.

While this may seem like a small amount in comparison to some of the other expenses mentioned, the food shop is often where we try to scrimp and save when we fall on hard times.

Income protection can take care of the cost of your weekly food shop, as well as many other essential costs.
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At the beginning of 2020, credit card debt in the UK was at £2.1 billion, with almost 27 million UK residents in some kind of debt.

Becoming unable to work could make it hard to keep up with credit card or loan payments (including car finance or other financed goods).

Failure to keep up with payments could result in additional interest being incurred or late fees issues - resulting in a higher total needing to be paid.
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The average spent on public transport each month comes to an average of £94.

This includes the cost of public transport, as well as petrol and diesel vehicles.

While this amount may reduce while you’re unable to work as you won’t need to commute there may be additional spending on public transportation if your illness or injury leaves you unable to drive.
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Your total cover estimate

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What does income protection not cover?

There are a couple of circumstances in which you won’t be covered when making a claim on your income protection policy, including (but not limited to):

  • Unemployment
  • Redundancy
  • Self-inflicted illness or injury
  • Illness or injury as a result alcohol or drug misuse

To fully understand your policy, and what you’re eligible to claim for, it’s important to read the terms and conditions offered by your chosen provider.

Alternatively, when taking out cover through a broker (like Reassured), you can ask any questions you need to ensure the policy you’re taking out is right for you.

Reassured can guide you through the whole application and decode any insurance jargon.

How does an income protection claim work?

Making an income protection claim can be as simple as these four steps:

STEP 1 - Contact your provider to make a claim

Upon developing an illness or sustaining an injury that leaves you unable to work, you can make a claim on your policy.

You’ll need to contact your provider to do this. You should be able to find details on how to claim on your providers website.

It’s likely you’ll be a sent a claims form, which you’ll need to complete and send back to your provider.

STEP 2 - Show proof of your earnings

Along with your claims form, you’ll also need to provide proof of your earnings.

You could be asked to provide payslips, P11D and P60s (if you have an employer) or proof of your gross profits if you’re self-employed.

If you’re the director of a limited company, you could also be asked to provide proof of any profits or dividends you receive.

STEP 3 - Show proof that you’re unable to work

As well as providing proof of earnings, you’ll also need to show proof that you’re medically unable to work.

You’ll need to provide some information about your incapacity, such as what illness you’ve been diagnosed with or what injury you have sustained and when it occurred.

You’ll also likely be asked for your GP and/or medical specialists contact details.

STEP 4 - Your claim will be assessed

Once your provider has all the necessary information, your claim will be assessed.

This could result in one of the following outcomes:

  • Your claim is accepted - After this, you’ll need to wait for your deferred period to pass. If you’re still unable to work after this time, then your monthly payments will commence
  • Your claim is accepted but a smaller benefit amount is paid out - If you’re earning less than you were when you took your policy out, it may be that you receive a smaller benefit amount
  • Your claim is rejected - It’s rare that claims are rejected. However, if a claim is rejected it’s likely to be because the information provided during the application wasn’t correct or your condition doesn’t match the definition of incapacity listed within your policy

While these four steps help to give an idea of what’s required when making an income protection claim, it’s important to know that the claims process can vary between different providers.

When making a claim, your provider will be able to inform you of the steps you need to take and assist you through the process.

When taking out a policy through Reassured, a friendly member of the team can also be on hand to answer any questions you may have.

What to expect when claiming income protection

When making an income protection claim, you’ll need to provide key information, including:

  • Your name
  • Your policy number
  • Your contact details
  • Your condition
  • Your occupation
  • Your income

To ensure the process runs as smoothly as possible, it’s wise to have any necessary documents to hand so you can easily provide the details required.

For example, to provide proof of your illness/income it’s a good idea to have your GP’s contact details to hand, as well as any relevant doctors’ notes and your most recent pay slips.

When can you claim income protection?

You can claim on your income protection policy when you develop an illness or sustain an injury that prevents you from working.

The illness/injury will also need to meet the definition of incapacity listed within your policy:

  1. An 'own occupation’ definition of incapacity will allow you to claim for any illness or injury that prevents you from doing your own job. This means you’ll simply need to be unable to perform your daily activities and tasks
  2. A ‘suited occupation’ (or suited tasks) definition means you can claim if your illness/injury prevents you from doing your own job, as well as other jobs that are suited to your skills and experience. For example, if you’re a taxi driver and you sustain a leg injury and can no longer drive. While you won’t be able to do your own job, you could take on a role in a taxi call centre booking in rides. Only if you’re unable to do either will you be able to make a claim
  3. An ‘any occupation’ definition will allow you to claim if you’re unable to do any job. Typically, this definition will require total disability for a claim to be successful and you may need to prove that you’re unable to do basic daily tasks - such as writing your name

Most income protection policies come with an own occupation definition, meaning you can claim when you’re unable to do your own job.

Typically, the other definitions can be offered to those with occupations that are considered higher risk so that providers can mitigate the risk of offering cover.

Once a claim has been accepted, you’ll need to wait for your deferred period to pass before you’ll start to receive payments. Once this period has come to an end, your payments will commence.

The deferred period is the time in between making a claim and when you receive payments. Common deferred periods include 4, 8, 13, 26 and 52 weeks.

For help understanding your policy, why not take out income protection through a broker like Reassured?

Not only will you have a dedicated team member to answer all your questions, but you can also compare quotes (free of charge) from all major UK providers.

Simply get in touch today.

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How many times can you claim income protection?

Most income protection policies will allow you to make as many claims as necessary throughout the lifetime of your policy.

However, you can only make one claim at a time and usually a provider will need a certain period to have passed before you can make another claim.

It’s typically easier to make multiple claims on a short-term income protection policy, due to the shorter payment period (claims can last for either one, two or five years at a time).

Whereas long-term income protection could pay out until your policy comes to an end (if you’re incapacitated for this length of time). Therefore, the policy is more likely to continuously pay out to you.

What are the most common reasons for claiming income protection?

Among most leading income protection providers, the most common reasons for claiming often include:

  1. Cancer
  2. Musculoskeletal injuries
  3. Mental health conditions

The table below shows two of the UK’s leading income protection providers and their top claim reasons in 2023:

Reason for claim Legal & General Aviva
Musculoskeletal injuries43.2% of claims26.6% of claims
Cancer17.5% of claims13.6% of claims
Mental health conditions5.4% of claims23.9% of claims

This information has been taken from the most up to date claims statistics on each providers website and is correct as of 20/11/24

How long is the average income protection claim?

The average claims duration in 2023 was 88 weeks (equivalent to 1.5 years support), according to The Exeter. With the length of their longest ongoing claim being 26 years[2].

However, the exact length of an income protection claim period can vary significantly as it’s possible to take out cover with a short-term or long-term payment period.

A short-term policy will pay out to you for a short period of time, usually a maximum of one, two or five years. After this period has passed, the claim will stop and your payments will cease.

Whereas a long-term policy can pay out to you for the remainder of the policy term (which could be until you reach retirement).

What is the average income protection claim?

How much will be paid out to you when claiming income protection will vary, depending on your income and the percentage your chosen provider offers to pay out.

Income protection can pay out a percentage of your usual earnings while you’re unable to work, most commonly this percentage is between 50% - 70%.

In 2023, the avergae income protection claim for Legal & General was £669[3].

Why could an income protection claim be denied?

While it’s rare, it’s possible for an income protection claim to be denied. This could be for one of the following reasons:

  • Non-disclosure - If the information you provided at the point of application wasn’t completely true, your provider has the right to deny a claim. For example, if you lied about your health to make yourself seem like a more favourable candidate, this would be classed as non-disclosure. If non-disclosure is found, your policy will be voided, and no payments will be made
  • Your illness/injury doesn’t match the policy definition of incapacity - It may be that your illness or injury doesn’t match your policy’s definition of incapacity. For example, a minor sprain may not prevent you from carrying out the daily tasks of your job and therefore a claim likely won’t be accepted
  • Your illness/injury is excluded from your policy - If applying for income protection with a pre-existing medical condition, depending on the severity, it could be added to as an exclusion to your policy. This means you won’t be able to claim for this reason and any attempted claims for this reason won’t be accepted

Can you get an income protection lump sum?

No, income protection payments are paid monthly to mimic an income and allow you to keep up with your monthly financial commitments.

If your policy contains a ‘death benefit’ your loved ones could receive a lump sum payment if you pass away during the policy term.

A death benefit will usually pay out a specified amount or a certain multiple of your monthly benefit upon your passing.

Not all providers will offer this benefit with their income protection policies.

Compare income protection quotes to find the best deal

When purchasing an income protection policy through Reassured, you’ll benefit from a wealth of industry knowledge.

While you can’t claim on your income protection policy through Reassured, a friendly member of the team can answer any questions you might have when the time comes.

So why not compare income protection using the whole of market comparison service offered by Reassured?

You’ll also benefit from:

Simply get in touch today.

Compare Income Protection Quotes from Whole of the Market »

Sources:

[1] https://www.abi.org.uk/news/news-articles/2024/9/protection-insurers-pay-out-record-7.34-billion-to-support-individuals-and-families/

[2] https://www.the-exeter.com/news/the-exeter-releases-its-annual-claims-statistics/

[3] https://cms.legalandgeneral.com/globalassets/adviser/protection/protection-new/adviser-toolkit/our-claims/2023-claims-statistics-infographic.pdf

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