What's the most common reason people claim on sick pay insurance?
Ever thought about what you’d do if you were suddenly struck down by illness, and couldn’t work?
Income protection, known as sick pay insurance, is a type of life insurance policy that protects those all important pounds you work so hard for. With this cover in place, you can cover up to 60% of your income. So, you can pay for the things that matter, whilst you’re out of action.
The top 5 reasons
Looking at LV=’s most recent claim statistics (2022), they found that the top 5 reasons that people claimed on their income protection policy were the following:
- Musculoskeletal (25% of claims)
- Cancer (20% of claims)
- Mental health (12% of claims)
- Fractures (10% of claims)
- Covid-19 (6% of claims)
Confused about musculoskeletal?
Pronounced (MUS-kyoo-loh-SKEH-leh-tul), this long, scary looking word is just a medical term for illnesses that can affect your muscles, bones, tendons, ligaments, joints, and cartilage.
But as you can see from LV=’s claims data, musculoskeletal illnesses are extremely common, and is the reason behind a quarter of last year's LV= income protection insurance claims.
Why do you need income protection insurance?
Falling ill can impact your life in countless ways. But sadly, your earnings are likely to bear the brunt.
If you suddenly become ill, or injured, the last thing you’d want to worry about is how you’re going to pay the bills. You’d want to put all your energy into your recovery, and income protection can help you to do this.
Do you need to put your income protection policy in trust?
We always recommend putting your life insurance in trust - there’s some great benefits to doing so.
A trust form is a legal document where you can name which of your loved ones you’d want to receive the money from your policy. But there’s some additional benefits, like mitigating inheritance tax, and avoiding probate.
But when it comes to income protection insurance, there’s no reason why you’d need to put your policy into trust. The reason being, you wouldn’t be leaving the pay-out to anyone, as when you claim on this policy, you’d use the money yourself.
Is income protection taxable?
No!
The monthly bursts of cash from your income protection policy will not be subject to income tax. So whatever you’re covered for, is what you’ll receive each month, if you made a claim on your income protection policy.
Income protection vs critical illness insurance
The only policy that’s similar to income protection is critical illness cover. But how do you know which type of policy is right for you? The main differences of critical illness cover, compared to income protection are:
- Lump sum payout: If you are diagnosed with a covered critical illness, the policy pays out a one-time lump sum. Compared to income protection which pays out in regular monthly bursts.
- Specified critical illnesses: Critical illness insurance typically covers specific conditions, such as cancer, heart attack, stroke, organ transplant, or major surgeries. Whereas income protection insurance covers you if you are signed off work with an illness or injury.
- Deferral period: With income protection you have a deferral period. It’s the time period between making a claim and your monthly payments starting. Your deferral period typically aligns with any sick pay scheme your employer may offer.
- No requirement to be unable to work: Unlike income protection insurance, critical illness insurance pays out regardless of your ability to work. The lump sum can give you and your family some peace of mind, whilst you’re ill.
We hope the day never comes
We always say we hope you never have to claim on your life insurance policy. But in the same breath, you also want to know that your life insurance will pay-out if you need it to.
So here’s what some of the top life insurance providers in the UK paid out in income protection claims, just last year (2022):
- LV= paid out a staggering £14.7 million in income protection claims
- Legal and General paid out a total of £3 million
- More than £50 million was paid out by Aviva in 2022
Heard about our calculator?
We’ve made it easier than ever to calculate your costs.
To find out a rough estimate of how much your income protection policy could cost, all it takes is 30 seconds of your time. You can see an estimate of your costs in just 3 simple steps. Get started now by clicking the button below.
It’s more than just a policy
When you take out cover with the UK’s leading life insurance providers, they often offer free additional benefits*.
Depending on which insurer you choose, here is an example of some of the added extras you could access, just to give you a taster:
- Mental health support - you may have the option to speak to a mental health specialist online and depending on which provider you’re with, you could also receive up to four therapy sessions a year
- Access to 24/7 virtual GP appointments - having this benefit in your back pocket can be an absolute game changer if you need to speak to a doctor ASAP
- Second medical opinions - if you’ve recently received a diagnosis and you want a second opinion from an expert in your illness
- Personal nurses - these experienced nurses can offer support for long-term physical and mental illness, trauma, bereavement, and disability
- Advice from nutritionists - receive tailored meal plans, suited to your food preferences and goals
- Fitness plans - a professional team of sports coaches can create tailored four or eight-week plans, designed to help you reach your goals
A bit about us
At Caspian, our priority is you.
We work with the UK’s top life insurance providers, so that we can find the best income protection insurance for you. When you choose Caspian you’re also choosing ongoing support from our award-winning customer care team, trust support, and claims team.
What are you waiting for? Kickstart your life insurance journey today, and click the button below to get started with your free income protection quote!
*Benefits are not contractual and could be removed or amended at any time