Recent research reveals that that group and individual protection policies have paid out a combined record of £7.34 billion in claims to support people experiencing bereavement, illness and injury in 2023.
That’s approximately £20.1 million paid out per day.
Individual policies paid out more than 275,000 life insurance, income protection and critical illness claims, totalling £4.85 billion. This represents a 5% increase in the number of individual claims paid and a 14% increase in the total value of claims paid compared to 2022.
The total payout for individual income protection claims was £177 million, an increase of £3 million compared to 2022, with the average payout up to £9,425.
Income protection insurance is a long-term policy designed to help you if you cannot work due to illness or injury.
Many people would struggle to be able to afford their lifestyle if they could not work.
It ensures you have an income until you are fit and able to return to work, no matter how long!
As of 2023, more than 1,660 individual income protection claims have been in payment over 10 years, with 376 of those claims in payment for more than 20 years.
Some of the important facts to consider are as followed:
• It replaces part of your income
• It pays out until you can start working again
• There is often a waiting period before you can claim
• It covers most illnesses that leave you unable to work
• You can claim as many times as you need to (for as long as you still have the policy)
However, it is important to note that this is not the same as serious illness or critical illness cover (which will pay out a cash sum if diagnosed with a serious illness).
Furthermore, it also differs from short-term illness protection as this normally only lasts between 2 and 5 years.
So, a question people normally ask themselves is ‘Do I really need this?’.
The answer is usually yes!
It doesn’t matter if you don’t have children or other people dependent on your income, if you become ill and would therefore struggle to pay your bills income protection is definitely something you should consider!
It is also important to note that not all employers offer enhanced sick pay within their contract – and statutory sick pay is only £116.75 per week (in the 2024/2025 tax year), so you need to make sure you have a plan in place if you can’t work.
If you are self-employed you will not even have sick pay to fall back on, so it is especially important for you!
If this is something you would like to learn more about or have a look at the variety of policies you can apply for, do not hesitate to get in touch.
Get in touch with me here, call 01323 436680 or book directly onto my calendar here.
Willow Tree Financial Services are a Financial Adviser firm based in Polegate, East Sussex, UK. We specialise in Financial Planning, Mortgages, Investments & Pension Planning, Protection & Insurance Wills, Trusts & Estate Planning.
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Figures taken from Association of British Insurers:
