Standard Life upgrades income protection

by Gill Montia

Story link: Standard Life upgrades income protection

Standard Life has introduced a number of changes to its Income Protection Plan with the aim of making it easier for customers to understand, and for advisers to recommend.

The company has removed exclusions from the policy, including HIV and pregnancy, whilst also increasing the maximum benefit by £25,000, to £300,000.

Sales of Income Protection insurance are continuing to fall, but a study conducted by the insurer last year found that:

Over two million British professionals had lost income through being off work because of illness or injury.

Of those questioned, 13% lost between £1,000 and £5,000 while off work and 11% put their losses at between £5,000 and £40,000.

The current maximum paid by the state under Incapacity Benefit is £81.35 per week, whilst the average UK household spends £443 a week, mostly on household essentials.

Consequently 23% of people surveyed said that they had borrowed from friends and family to get through their period of ill health.

Only 11% reported that their employer had continued to pay them while off work.

Eleven per cent borrowed money from their bank or used their credit card to get by and 5% deferred large bills, such as the mortgage.

Only 8% had their financial losses covered by some form of insurance.