The Business Insurance Bureau

Income Protection Insurance

This product is designed for anyone who might struggle to meet financial commitments if they’re unable to work.

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Introduction

Income Protection is designed to provide income during periods of long term incapacity.

Cover can be arranged on an individual basis or employers can arrange a group policy to benefit their employees.
Benefits are paid monthly and limited to an agreed percentage of annual salary. Any salary continuing to be paid and state benefits are deducted from these payments.

The policy would come into effect following a ‘deferred period’ chosen by the policyholder at inception, usually 4, 13, 26 or 52 weeks. Payments would continue until the individual/employees full return to work, death or expected retirement date. The definition of disability can vary from being totally unable, through sickness or accident, to follow their stated occupation to being totally unable to follow any remunerative occupation whatsoever and care should be taken when choosing a contract and all implications must be fully considered.

As with any policy there are restrictions and exclusions which will be detailed in your policy document. The most common ones would include Pre Existing Conditions, Self Injury, Drugs & Alcohol, Pregnancy and Aids.

Naturally, the policy will also require that the individual is in employment immediately before the onset of the illness. Premiums vary depending on the levels of cover required but factors would include Age, Sex, Occupation, Medical History and Hazardous Pastimes.

Frequently Asked Questions

Do I need income protection insurance?

This product is designed for anyone who might struggle to meet financial commitments if they’re unable to work.

What does income protection cover?

There are three main cover areas to choose from:

Accident and sickness only

Unemployment only

Accident, sickness and unemployment cover (ASU)

When should I get covered?

You can take out Income Protection Cover anytime, but most people tend to think about taking out a plan when they’re changing jobs, getting married or starting a family.

What are my cover options?

When picking your plan, you need to decide whether you want long-term or short-term cover:

Short Term Income Protection Cover gives you payouts for a maximum period of 24 months per condition.

Primary and Comprehensive plans can give you payouts as long as the plan lasts, if you can’t or are unlikely to ever work again.

Can I get income protection if I’m self-employed?

Yes, the self-employed are one of the most common groups who take out IP cover.

Is it possible to take out a joint income protection policy?

It’s not possible to take out joint income protection insurance because policies need to be tailored to individual circumstances, although the entire household income and requirements should be considered when arranging cover.

What you need to know before you take out income protection insurance?

You should always check the terms and conditions of any insurance policy very carefully before you sign up to make sure it meets all your needs. You will need to be sure of exactly what you can claim for, when you can claim and how much you’re likely to get.

There are rules which say the policy documents must be written in easy-to-read plain English, so you can understand what you’re signing up to.

Do I get a payout at the end of the policy if I don’t claim?

The policy is designed to only pay out if you’re unable to work due to accident or sickness during the term of your policy. Once your policy has reached its end date, your cover stops and you won’t get anything back.

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What's Covered?

Personal Accident/Sickness Insurance

Can provide compensation in the event of disablement or death due to:

Accident only

Accident & Specified Illnesses

Accident & All Sickness (excluding exclusions)

Accident & Sickness in Specified Circumstances

Many employers buy such policies to both fill the gap on PHI waiting periods and to make sure that accidents are compensated, whether or not the employer is legally liable due to negligence. Personal Accident and Sickness cover is also often included as an additional benefit in other policies such as holiday and travel insurances, motor insurances covering sporting activities.

Policies can be on an individual or group basis with the benefits of lump sums and short term income benefits generally payable for no more than two years.

Benefits are scaled and would depend upon disablement being temporary or permanent and would in most policies be restricted to the total payable under the fatality benefit.

The definition can vary between policies and again great care must be taken when choosing a policy for example one policy may state that the limb must be severed yet another may include the total and permanent loss of use of the limb.

Exclusions would include:

Pre Existing Medical Conditions

Drug or Alcohol Abuse

Self Inflicted Injury

Hazardous Pursuits

In some cases Age, Claims History and even Medical Evidence may result in exclusions or restrictions in cover provided. Premiums would be calculated upon Age, Sex and Occupation. Policies would normally be written on an annual basis although short term policies can be arranged if required although these policies are generally more expensive.

Medical Expenses Insurance

Designed to cover the costs of medical treatment and hospitalisation. Depending on the plan chosen, treatment can be carried out at a number of privately run establishments or be extended to include a number of NHS hospitals.

Benefits would include:

Hospital charges

Specialist fees

Outpatient appointments

Specialist treatments such as radiotherapy, nursing at home, private ambulance, emergency NHS treatment and cash payments for hospital stays

The premiums would depend upon which level of cover was required and if the policy was extended to include family members. Age, Sex and Health would also be factors for consideration. As with any policy there are restrictions and exclusions and would include Aids, Pre Existing or Chronic Conditions.

Most policies can now be extended to include Dental Plans, Counselling Services and Alternative Therapies. Policy excesses or contributions can be arranged to suit your own needs and will often result in a reduction in premium. Employers often fund such policies as a benefit to staff and to make sure that key personnel are not left unable to work through lack of capacity under the NHS.

Critical Illness Insurance

Provides a lump sum on diagnosis of major illness or disease rather than death. Policies initially covered the following diseases:

Cancer

Stroke

Coronary Artery Disease

Heart Attack

However, increased competition has meant that most policies now also cover Kidney Failure, Major Organ Transplant, Alzheimer’s, Parkinson’s, Motor Neurone Disease, Total Permanent Disablement, Blindness and/or Deafness, Multiple Sclerosis, Paralysis and Terminal Illnesses in addition to other conditions. Cover can be obtained on a standalone basis or added to a variety of life policies. Cover can be offered up to retirement age or on a ‘whole life’ basis and benefit levels can be arranged as required.

Exclusions would include:

Drugs

Self Inflicted Injury/Illness

HIV

Pre Existing Conditions

Premiums would depend upon levels required and factors including Age, Medical History etc. Depending upon your own circumstances you may wish to consider a group policy or ‘Key Person’ policy as it is also known.

Making it cheaper, by doing it right™

Doing it right is more important than making it cheaper, but we make it cheaper because we do it right.

Working With Us

Which Services will we Provide you with

The Business Insurance Bureau conducts both client and market research to identify solutions to the needs of an almost exclusively business clientele. We will make a recommendation once we have assessed your demands and needs.

Payment Terms

All premiums due to insurers must normally be paid by you on or before the date that cover commences. Where alternative methods of payment are available these will be discussed with you so that arrangements can be put in place by the due date.

Confidentiality & Security

We are registered with the Data Protection Registrar. We will ensure that any information obtained from you is treated by us and anyone else involved in arranging, considering to arrange or managing your insurance, as Strictly Private and Confidential. We will not provide your information to anyone else unless we:
have your permission to do so, or -are required to by the FCA, or -are required to do so by law, or -are required to do so in the normal course of arranging or negotiating and maintaining, or renewing financial services products which we may from time to time approve.We take appropriate steps to ensure the security of any money, documents, other property or information handled or held on your behalf.

All information in any form, with the exception of policy documents and certificates issued on behalf of insurers and supplied by us, to you, should be treated as Strictly Private and Confidential and not be released directly or indirectly to any other party, without our explicit consent.

Note: in transacting your insurances with The Business Insurance Bureau, you are deemed to have accepted our Terms of Business. Your accepting of these Terms of Business does not affect your statutory rights.

Claims

You must notify us as soon as possible of a claim and circumstances which may give rise to a claim. In the event of a claim you should contact this office and we will promptly advise you and if appropriate, issue you with a claim form and pass all details to your insurer. You should not admit liability or agree to any course of action, other than emergency measures carried out to minimise the loss, until you have an agreement from your insurer. We will remit claims payments to you as soon as possible after they have been received on your behalf. In the event that an insurer becomes insolvent or delays making settlement we do not accept liability for any unpaid amounts.

Cancellation Rights

You would have the right to cancel a policy within 14 days of its inception or upon receipt of the policy documentation whichever is the later. You would as a Consumer and without providing a reason, cancel the policy by confirming this is in writing to the address of our office through which your policy was placed. Any policy documentation and in particular any legal document, i.e. Certificate of Motor Insurance, Employers Liability Certificate, MUST be returned with your instruction to cancel. By exercising your right to cancel the policy, you are withdrawing from the contract of insurance.

Duration & Termination

Our services may be terminated without cause or penalty by giving one months’ notice in writing. In the event that our services are terminated by you other than at the expiry of the policy we will be entitled to retain any fees and all of the brokerage payable. The responsibility for handling claims reported after the date of termination shall in the absence of an express agreement be the responsibility of the party taking over the role.

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