Standard Life boosts income protection cover

Standard Life has introduced improvements to its Income Protection Plan, increasing the maximum benefit by £25,000 and removing all plan exclusions, including pregnancy and HIV.

Andrew Cook, Product Marketing Manager, Standard Life said: “Protecting your income should be as important as insuring your life or home. Yet income protection sales continue to fall and the cover gap has widened to £175 billion.

“The changes to our plan will make it easier for customers to understand and advisers to recommend as any remaining plan exclusions have been removed. The increase in the maximum level of benefit will now allow us to cover up to £300,000 during a claim.”

A study conducted by Standard Life in 2006 found that:

Over 2 million British professionals have lost income through being off work because of illness or injury

With 13% of people said they lost between £1,000 and £5,000 while off work and 11% said they had lost between £5,000 and £40,000

Currently, the state will pay a maximum of £81.35 per week through Incapacity Benefit. In 2005 – 2006, the average UK household spent on average £443 a week, the majority of which was spent on household essentials like transport, food, housing, fuel and power.

So how does the average UK household get by?

In the Standard Life survey, 23% of people surveyed said that they had borrowed from friends and family to get by while the lucky few (11%) said their employer had continued to pay them while off work. Unfortunately 11% had borrowed money from the bank or used their credit card to get by and 5% had deferred their mortgage or other big bills while they recovered. Only 8% had some form of insurance to help them out.

Andrew Cook concluded: “Many people are under the illusion that their employer will continue to pay their wages while they are off work, but our research shows that only 11% of employers continued to pay people while they were off work.

“That is why it is important that you have some protection in place to cover you at a vital time. Income Protection is an essential part of the financial planning jigsaw and covers your income, not just your mortgage, so you can still afford to live without resorting to borrowing from friends, family or the bank.”