Lifestyle Protection
Options
Income Protection Benefit - Your Questions
Answered
What is
Income Protection Benefit?
How do I
select which features best meet my needs?
When will the
benefit pay out?
How
we assess your claim
How long the
claim is paid
How benefits
are paid
Premium
payments when claiming (Waiver Of Premium)
Other income
which is likely to reduce your benefit
What is not
covered by Income Protection Benefit?
What is Income Protection Benefit?
It is a benefit that is
designed to replace a chosen level of income if you’re
incapacitated as a result of illness or injury.
You select the features
to make sure that the cover is right for you. You decide:
the amount of benefit you
require,
how soon the benefit
should start, and
how long the cover should
last.
We provide cover until
the end of the term, no matter how many claims you make.
We pay you a monthly income
for as long as the claim is valid.
BACK TO
TOP
How do I select which features best
meet my needs?
The amount of benefit which can be
paid
You choose how much benefit
you’ll need.
Remember that tax and
national insurance are deducted from your normal earnings but not
from the benefit we pay you. This means that you should not need
benefit which is more than your net earnings.
The maximum amount we will
pay out is the monthly equivalent of two-thirds of your
pre-incapacity earnings. However, if you’re not employed or
self-employed at the start of incapacity, the maximum monthly
amount we will pay out is £1,000.
See the ‘Other income which is likely to
reduce your benefit’ section.
The earnings on which to base your
cover
When choosing your cover,
remember that if you claim, we’ll pay benefit based on your
pre-incapacity earnings in the 12 months immediately before your
period of incapacity.
If you’re employed, these
are your pre-tax earnings for PAYE assessment purposes, excluding
benefits in kind.
If you’re self-employed,
these are your share of pre-tax profit from your trade, profession
or vocation after deduction of trading expenses.
We will ask you for
evidence of your earnings.
Income from savings and
investments is not taken into account.
Automatic increases to your benefit
payments
Your benefit will
automatically increase each year in line with the Retail Prices
Index. See the ‘Will I be able to increase my cover in the future’
section.
When benefit payments
start
There will be a period at
the start of your incapacity for which we do not pay benefit. This
is known as the deferred period. You can choose between 3, 6 and 12
months. The longer the deferred period, the cheaper your policy
will be.
Your choice should allow
for any earnings which you expect to continue after you stop
working, such as sick pay, or how long you’re prepared to live on
your savings.
How long the cover should
last
You choose for the
cover to end when you think that you would no longer need the
benefits. This can be up to your 65th birthday but should be no
later than your planned retirement date.
There is a minimum 5 year
cover period and you must be under age 60 when you start your
plan.
BACK TO
TOP
When will the benefit pay
out?
The deadline for claiming
Tell us as soon as possible
but no later than 8 weeks from when you’re first incapacitated.
Otherwise there may be a delay in paying benefits.
When we pay out
When you are diagnosed as
being incapacitated for a continuous period longer than the
deferred period.
The extent of incapacity
Our usual definition of
incapacity is any illness or injury as a result of which you’re
unable to follow your own occupation and you’re not following any
other occupation. If you’re not in an occupation at the start of
your illness or injury we will measure incapacity by your inability
to perform any three of the activities of daily living without the
assistance of another person or the use of special devices or
equipment.
The activities of daily
living are:
washing or bathing so as
to maintain personal hygiene;
putting on and taking off
all necessary items of clothing;
moving from one room to
another or getting in or out of bed or a
chair;
getting food or drink into
the body once it has been prepared and made available;
getting on and off the
toilet and maintaining personal hygiene following the use of
it;
controlling bowel or
bladder function.
BACK TO
TOP
How we assess your claim
If you’re employed or
self-employed at the time of your claim, we’ll look at the duties
of your occupation and your ability to do them. You will qualify
for benefit if you’re unable to perform the essential duties of
your occupation, resulting in a loss of earnings, and you’re not
doing any other work. We will ask for evidence of your loss
of earnings.
If you’re not employed or
self-employed at the time of your claim we’ll assess your ability
to perform the activities of daily living.
We will ask for evidence of
the date that your incapacity started.
We will not be able to
accept your claim if you do not provide us with medical or other
evidence we ask for.
BACK TO
TOP
How long the claim is
paid
The benefit will be
paid until the first of these events:
you recover and are no
longer incapacitated,
your cover for this
benefit ends,
you die.
Claiming again after returning to
work
There is no limit to
the number of claims you can make. You must restart premium
payments when your claim ends so your cover is maintained.
If you need to claim again
for the same cause within 3 months of returning to work then the
deferred period will not apply.
Returning to part time or less well
paid work
In addition to the
money you earn we may pay you a reduced benefit, which takes
account of your lost earnings.
We will pay reduced benefit
whilst you are medically unable to fully resume the duties of your
occupation and can demonstrate a reduction in earnings compared to
your pre-incapacity earnings.
See the ‘Other income which is likely to
reduce your benefit’ section.
BACK TO
TOP
How benefits are paid
Benefits are payable on
premium due dates from the end of the deferred period.
BACK TO
TOP
Premium payments when claiming (Waiver
Of Premium)
You should continue to pay
premiums until we accept your claim. However, we’ll pay your
monthly premiums after you have been incapacitated for six
months.
We will continue to pay
your monthly premiums until the first of these events:
you recover and are no
longer incapacitated,
your cover for this
benefit ends,
you die.
BACK TO
TOP
Other income which is likely to reduce
your benefit
We will reduce the benefit
we pay if any of the following take you over the maximum benefit
allowed:
continuing payments from
your occupation - such as sick pay or self-employment,
pension payments - unless
you were entitled to them while still working,
other income protection
benefits - if they arise because of your incapacity and
either result in regular payments to you or make regular payments
on your behalf - such as mortgage payments,
state benefits payable by
the Department of Work and Pensions as a result of your
incapacity.
If your benefit is reduced
we do not refund any of your premium payments to us.
BACK TO
TOP
What is not covered by Income
Protection Benefit?
We will not pay out if you
die. Your plan will end and no premium refund will be paid.
We will not pay out if the
cause of the claim results from alcohol or drug abuse, criminal
acts, flying on a non-commercial basis, hazardous sports and
pastimes, HIV/AIDS, living abroad (defined as outside of Australia,
Canada, the European Union, New Zealand, Switzerland or the USA for
more than 13 consecutive weeks in any 12 months), self-inflicted
injury, unreasonable failure to follow medical advice, or war and
civil commotion.
BACK TO TOP