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Everything you need to know about additional payment benefits on income protection

Everything you need to know about additional payment benefits on income protection

In the second of our “everything you need to know about…” series, we look at some of the lesser know additional benefits that clients may be able to claim on within Income Protection Plans. As always we look to help advisers better understand who offers these features, how and when they can be used and by whom.

The role of income protection is to replace lost income if a clients is unable to work due to ill health or income. Across the market however, many plan’s offer features which depending on the scenario will provide either faster payment of income, an additional sum of money, an increase in the income paid or even payment of income even though the client is fully fit and still able to work themselves. Below we provide examples of such features.

 

Terminal Illness

When someone receives the devastating news that they do not have long to live, their emotional responses will vary. Feelings of shock and grief may be difficult for some people to comes to terms with and there is a risk that these feelings can turn into depression. Others may seem calm and matter of fact about it, wanting to live the rest of their lives as normally as they can, perhaps focusing on the things they would like to do while they are still able to. For some, the news may come as a relief, particularly if they have been living with extreme pain for a long time and their quality of life has been severely impacted by their condition over several years.

In this article we look at the ways providers can help.

To read more click here

Hospitalisation benefit

With human nature being what it is, we tend to think we will not be among those who are admitted to hospital due to an accident or illness each year. Advisers selling protection will come across many clients who think they are invincible. However, there will be some people who start the day at home as normal but will finish it in a hospital bed, through sudden illness or accident.  Whilst Income Protection plans are designed to subsidise a loss of income due to illness or injury, the deferred period often means that the immediate costs of hospitalisation for the family have to be borne before any payment is received.

If insurers can step in and provide financial help while a client is in hospital, on top of the usual income protection benefit, this can make things a little easier for them and their families. In this insight we look at what financial help insurers can provide if a client is admitted to hospital.

P.S. if an adviser has clients that have been hospitalised due to COVID-19 it may be worth checking if their policy includes this feature.

To read more click here

Trauma Benefit

Income protection plans are correctly thought of as providing a client with a replacement for their income if they become ill or injured and unable to work.  But clients may be unaware that there are situations where they could claim an extra on top of their usual income protection benefit if they accidents that leave them with disabilities that are permanent and irreversible. Trauma benefit, which does exactly that, is a relatively new feature on income protection plans that some insurers provide to add value to their plans. In this article we explore how insurers provide additional support for clients in such circumstances.

To read more click here

Fracture Cover

A simple accident, and a broken bone, can easily lead to unforeseen financial stress particularly for those who have physically demanding occupations. Fractures can make it difficult or even impossible for clients to work for weeks or even months whilst they recover. Providers who offer Fracture Cover include it as an added benefit which will not affect the client’s ability to claim on the core cover. Here we take a look at how insurers compare.

To read more click here

Carer Benefit

The UK has an unpaid army of dedicated carers made up of mums, dads, brothers, sisters, aunties and uncles and friends who take it upon themselves to look after a family member, partner or friend who needs help because of their illness, frailty, disability, a mental health problem or an addiction and who cannot cope without their support. 

Sometimes people caring for relatives do not think of themselves as carers, as they are ‘just’ looking after their parent or child, as family members do. This is perhaps why many do not look at whether they are eligible for the range of financial, emotional and practical support that carers may be entitled to. But caring for someone can be demanding and make it difficult for carers to take time out for themselves and to juggle their care responsibilities with work, which will have financial implications.  In this article we examine the support providers offer to carers on income protection plans.

To read more click here

Funeral Cover

Income protection is not designed to provide a payout on death, as its purpose is to protect clients’ income rather than their lives. However, some insurers include death benefits in their income protection plans, which will help a client’s family if they sadly die during the policy term.

Advisers may find it helpful to know which insurers provide death benefits, and how they work, as clients may find it reassuring that this benefit can pay for their funeral or used to provide their family with extra money if the worst came to the worst. In this insight we look at income protection death benefits and how providers compare.

To read more click here

Watch out for future “Everything you need to know” pieces where each week we will cover a different topic and provide you with the information you need to know to discuss the topics with your clients.

About The Author

Adam Higgs

Adam leads Protection Guru's detailed protection research and benchmarking of both product and operation features provided by insurers and has a vast knowledge of the protection market. He has been instrumental in building the protection comparison service Quality Analyser and maintaining the data to enable adviser to quickly and easily compare protection products based on qualitative measures. He also works with adviser firms to help in panel reviews and with insurers to help them understand the shape of the market, their strengths and the areas that could be improved in their products. In his spare time and when not spending time with his wife and two children, Adam is a keen Arsenal fan and enjoys hacking his way around a golf course.

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