10 top tips to help save you money on income protection insurance

save money piggy bank

By Bob Atoo
June 12, 2015

Like all insurance products, it’s possible to save money on income protection insurance if you know how.

Along with our detailed income protection buying guide, we’ve also laid out Bob’s top 10 tips on how to save money on income protection insurance below – giving you all the inside information you need to make an informed choice on the right policy for you.

Before we get into Bob’s tips, though, let’s first remind ourselves of just what income protection is…

Income protection insurance is presented in the three brand guises – short termlong term and accident, sickness and unemployment (ASU).

If you don’t know the key differences between the three may we suggest you read our full Income Protection Buying Guide and FAQs before you do anything else.


For those of you in the income protection insurance loop, then here is the Top 10 Tips (in no particular order of importance – as they’re ALL pretty crucial in their own rights) for reducing the cost of premiums related to this type of insurance package if you’re currently in the position of arranging a new policy or for that matter, looking to amend an existing one…

Tip 1: Don’t settle for second (or third) best

Otherwise known as choosing the right type of income protection for you. As simple as this may sound it’s easy to get lumbered with the wrong type of plan if you don’t do your homework prior to speaking with an income protection insurance provider. Each of the three main types not only offer different features, stipulations, terms and qualifying criteria to adhere to but can also see significant variations in premium prices.

Tip 2: Don’t smoke

While we shouldn’t be preaching what you should and shouldn’t be doing, if it means helping consumers achieve a better deal with their income protection insurance policy purveyors then it’s worth our while to tell it precisely as it is.

And it’s common knowledge that insurer’s frown upon smokers when it comes to the acquiring of personal insurance policies as generally speaking, research points to smokers being far more likely to succumb to serious illnesses related to their habit.

On average insurers will charge confirmed smokers in the region of 50% more for premiums than their non-smoking counterparts.

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Yet don’t always take this as gospel, as a little digging around found that some income protection insurance providers don’t add an extra premium at all. As always, it pays to shop around before agreeing to anything.

Tip 3: Don’t tell any porkies

Although you might be tempted to ‘forget to mention’ an underlying health issue which might not be picked up in a medical or brought to the income protection insurer’s attention when speaking with a consultant, there’s every chance that neglecting to own up to something which could potentially compromise your health and wellbeing will render your policy null and void at a later date. And when you might need it most. Remember that income protection-providing insurers are perfectly within their rights to reject a future claim if they discover a health condition you didn’t previously flag up, no matter how small it seems.

Tip 4: Don’t leave anything to chance

Ensure that you determine whether or not the premium you are being quoted for your elected income protection policy will remain a fixed amount throughout the proposed lifecycle of the plan, or alternatively if it’s specifically linked to age, subject to inflation differentials or dependent on regular reviews.

Tip 5: Think carefully about which cover you go for

When possible – and obviously conditional to your own personal circumstances – opt for ‘own occupation’ cover, as this will normally recompense the policyholder if they’re unable to do their own job. By the same token, try to side-step policies which cover ‘activities of daily living/daily working’ as historically these don’t pay-out unless your ability to undertake basic, everyday tasks (such as being able to dress yourself and hold a pen) are compromised.

Tip 6: Downscale your policy

It’s never too late to change your mind with regards to your income protection policy, as there might be times when you’re struggling to make the payments and are looking for an alternative schedule. With this in mind if you think the policy is too expensive then weigh up the pros and cons of reducing the monthly payments you’ve previously box-ticked (the less pay-out you’re willing to accept each month should you need to trigger the release clause and welcome payments, will in turn be reflected in the amount you are paying in the meantime for this future safeguard). Otherwise you could extend your deferment period or instead look into short term income protection plans.

Tip 7: Two plans are better than one

Income protection experts recommend bundling income protection and short term income protection together as the one, cost-effective package. They arrive at this conclusion by ascertaining that a standard income protection plan with an extended deferral period works out more competitively priced than one benefitting from a short period. However – and this is the clever bit in theory – you could potentially facilitate the short term policy to bridge that initial gap.

Tip 8: Check whether or not your cover’s covered

In most cases income protection insurance policy providers will meet your on-going premium costs if you are in the midst of receiving payment from the policy, having recently suffered an injury or illness setback mid-policy term. That’s unless you elect to take out an accident, sickness and unemployment version, for the record.

Tip 9: Plan for beyond the future

It’s imperative that you have everything in place to ease you back into a work environment, which might have become something of an alien concept if the policyholder has been removed from it for a long time due to injury/illness. Check what ‘return to work’ provisions (if any) are included in your income protection insurance package, as many comprise of counselling and rehabilitation initiatives to get you in the right frame of mind and spirit as well as body as you gear up to renew your career.

Tip 10: Speak to the professionals

As with anything insurance product-related, the best advice we could impart is to seek independent guidance in all matter income protection insurance as due to the very nature of the beast it can often be complicated. Moreover, given the wrong pointers in the beginning could impact on any state benefits you’d be in line to receive which might unwittingly land you in even more of a financial quandary.

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