Our recent changes could help make the income protection sale easier

29 April 2019
In 2018, our research found that almost four times more people owned life cover than an income protection product*.

Cyclist in the parkAnd with 25% saying they felt that income protection was too expensive1, it was clear that we needed to make our own income protection product more appealing. So, to improve the flexibility of our Income Protection product, we’ve introduced a new payment option of five years.

The five-year payment period provides an option for customers who either do not want, or cannot afford, a full term payment period, to have cover which is more comprehensive than the current shorter payment periods. This is currently the widest range of benefit payment periods available in the market.

Who could benefit from this extra flexibility?

You might have read about our recent blog about three new opportunities in the protection market. In it, Amanda touches on the changing employment landscape and how this could be seen as a positive for protection sales.

Between February 2017-2018, it’s estimated that 2.8 million people were employed within the gig economy2. Individuals who had temporary jobs or who were doing separate pieces of work, each paid separately, rather than working for an employer3. And these jobs aren’t just at food delivery companies, 28% of gig economy workers are professionals such as accountants or providing legal advice2.

To allow for this less traditional employment role of a ‘gig’ worker, income protection plans need to be as cost effective as possible. Our five-year payment period allows for greater cover whilst keeping the cost more affordable when budgets have to allow for a variable monthly income.

State benefit limitations

Currently classed as self-employed, gig workers also have fewer employment rights compared to an employee. Whilst entitled to rest breaks and a pension, they aren’t automatically entitled to statutory sickness pay2.

In fact, anyone labelled as self-employed who finds themselves too ill to work has to go through the process of applying for ’new style’ Employment and Support Allowance (ESA), part of Universal Credit 4. Successful applicants aged 25 or over can then expect an income of £73.10 a week4. However, it’s clear that someone working in a professional role, such as an accountant, might find it difficult to manage on less than £300 a month.

Having even a small amount of income protection to a protection plan could help an individual when they need it most. They wouldn’t have to navigate the benefits process and could receive their first payment as quickly as 4 weeks after they first become ill, if they choose our shortest deferred period.

Our five-year deferred period could ease the pressure of having to go back to work too soon and could give your client the choice to go back on a part-time basis initially.

Find out more about our income protection product and our new 5-year payment period.


* - Royal London. State of the protection nation 2018. 9% of people asked owned an income protection product compared to 35% with life insurance.

1 – Royal London. State of the protection nation 2018. 9% of people asked owned an income protection product compared to 35% with life insurance.

2 – Randstad. So what’s the truth about the gig economy? www.Randstad.co.uk/gig-economy accessed April 2019

3 – Definition from www.dictionary.cambridge.org/dictionary/english/ April 2019

4 – www.gov.uk, accessed 23 April 2019



About the author

Sarah Scott

Sarah has worked within communications and marketing in financial services since 2003. She enjoys writing and is interested in the influence of social media in marketing.

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit royallondon.com.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.