Royal London Enhances Income Protection Proposition
Royal London has introduced a series of updates to its income protection (IP) product, designed to strengthen and expand the flexibility of the IP product. The improvements aim to make it easier to claim, with features specifically for the self-employed, and payout limits that reflect today’s higher living costs.
Certainty of Income Replacement
One of the key elements that customers look for in the product is the certainty that their income will be replaced. Royal London has introduced an income replacement guarantee, which will allow customers to claim up to £1,750 every month, rising to £3,500 for doctors and surgeons, helping to support changing employment patterns.
Supporting the Self-Employed
The mutual insurer has also introduced changes that strengthen the financial safety net for those who are their own boss. Instead of asking to see evidence, such as lease agreements, office rental payments or phone contracts, over a three-year period, the insurer will now require just 12 months of costs. This is great news for those relatively new to self-employment who previously wouldn’t have had sufficient evidence.
Increased Payout Limits
Against a backdrop of higher costs that households have faced in recent years, Royal London has increased its replacement ratios so claimants can receive a payout with a higher percentage of their salary. The changes mean policies now pay 65% of the first £60,000 of the customer’s salary plus 50% of the remaining amount up to £250,000 as a monthly benefit when the policyholder is too ill to work. This means that someone earning £60,000 can now receive up to £3,250 a month, up from £2,875 previously.
Image: A person working from home, representing the self-employed
Industry Reaction
Jennifer Gilchrist, protection specialist at Royal London, said: “The pandemic followed swiftly by the cost-of-living crisis has impacted almost everyone’s everyday finances. It has focused people’s minds on the need for longer-term financial resilience and protecting themselves and their loved ones should hard times hit.”
Charlotte Rogers, protection specialist at Radcliffe & Co Independent Financial Advisers, added: “It’s encouraging to see that Royal London has listened to market feedback, addressing key issues and introducing changes that will make a real difference.”
Image: Royal London logo
A Step in the Right Direction
The changes made by Royal London are a step in the right direction, addressing the underserved group of self-employed individuals who often lack income protection. By making it easier for this group to claim, Royal London is helping to promote the benefits of income protection and provide a financial safety net for those who need it most.
Image: A self-employed person working on a laptop, representing the need for income protection
