In this article we look at a type of sick pay insurance known as income protection. We explain how a pre-existing medical condition could impact your income protection application, what information the insurance company will need, whether it is likely that you'll receive an exclusion for a pre-existing medical condition as well as how to guarantee the best price. We also explain how to get £50 cashback when you take out income protection insurance, read on to find out more.
What is a pre-existing medical condition?
A pre-existing medical condition is any illness or injury that you have suffered prior to taking out an income protection policy. Pre-existing medical conditions can vary in severity and so it will depend on a number of factors as to whether it will impact the cost of your cover and whether or not any exclusions will be applied.
Common types of pre-existing medical conditions with income protection applications include:
- Income protection with a history of back pain
- Income protection with anxiety, stress, mental illness or depression
- Income protection with high blood pressure
- Income protection with high cholesterol
- Income protection with cancer
- Income protection with diabetes
What is income protection insurance and how does it work?
Income protection insurance is a type of sick pay insurance that pays out if you are unable to work due to an accident or illness. You will need to complete your pre-agreed deferred period (the period you have to wait before a claim is made) in order to start receiving your chosen monthly benefit.
Income protection insurance is good for both employed and self-employed workers and most insurance companies will allow you to insure up to around 70% of your gross income. Benefits are paid tax-free and you can receive government benefits, such as Statutory Sick Pay on top.
Income protection is a comprehensive policy that will pay out for any illness or injury that results in you being unable to work, unless your policy has had exclusions applied. We cover exclusions in more detail later in this article, explaining what they are, when they are applied and what options are available to you.
Types of Income protection cover with a pre-existing medical condition
There are two types of income protection available, short term income protection and full income protection. With short term income protection, benefits can be paid for up to 1, 2 or 5 years. Alternatively, you could choose full income protection where benefits can be paid right up until retirement.
Importantly, unlike life insurance or critical illness insurance, with short term and full income protection, your policy remains in place after you have claimed. This means you can claim multiple times on the same policy; you just need to complete the agreed deferred period each time you make a new claim.
For a more detailed look at the different types of sick pay insurance available, check out our article 'A guide to sick pay insurance'.
Can I get income protection with a pre-existing medical condition?
The simple answer is yes but depending on what type of pre-existing condition you have, you may either have to pay more for your cover or have an exclusion applied. You should find it relatively easy to get income protection if you have made a full recovery or if your medical condition is mild and well-controlled.
In some cases, however, if your medical condition has been newly diagnosed, an insurance company may decide to postpone your application. Postponement does not mean that your cover has been declined, you are free to re-apply once the postponement period has been completed. Alternatively, you may wish to apply to another insurance company instead, in which case, you can do so straight away.
In rare situations, an insurance company may decide to decline your application due to your pre-existing condition. Again, you are free to apply to an alternative insurance company or you may wish to speak to an income protection specialist before you do so as they would be able to speak to the insurance companies on your behalf before you apply, giving you the best chance of being accepted. We explain more about how an independent income protection specialist can help with your income protection application later in this article, including how to get £50 cashback.
Do I need to declare a pre-existing medical condition?
It depends. When you apply for income protection, you will need to complete an application form which will include a comprehensive list of medical questions. Some questions will ask if you have ever suffered from an illness or condition, whereas others will ask if you have suffered in the last 5 years or in the last 3 months.
You need to pay attention to each question and answer it honestly. The general rule is that if you have sought any medical advice and had any symptoms or treatment in the last 5 years then you should mention it on the application form. It is always better to provide more information than you need to rather than risk not providing enough, as ultimately, you want to make sure the policy will pay out.
What information do I need to provide?
The more information you can provide the better as it will speed up the application process. The additional information you will need to provide on your income protection application will depend on the type of condition or illness you have and the severity. Insurance companies tend to ask for additional information in the form of a questionnaire. In most cases you will be asked to complete the questionnaire over the phone at a time that suits you.
A medical questionnaire will usually include the following questions:
- The name/type of condition that you have/had?
- When you were diagnosed?
- When you last had symptoms?
- Whether you have had any time off of work?
- Whether you had any specialist referrals or hospital admissions?
- Whether you take any medication, if so, what, how much and how often?
It would be sensible to have all of the above information to hand when you start the income protection application process.
What if I already have income protection insurance?
If you already have an income protection policy, it is worth checking the paperwork to see exactly what you have and whether a new policy would be better. Income protection quotes are tailored to your specific needs and so your situation may have changed. The cost of income protection has come down in recent years thanks to improvements in medical science (meaning people can recover and return to work quicker) and also due to improved technology and increased competition.
Speak to a specialist income protection broker such as LifeSearch as they will be able to check your current policy and compare it to what is available now. You may find that you can save money and get a more comprehensive policy at the same time.
How much does income protection insurance cost with a pre-existing medical condition?
There are 6 possible outcomes when it comes to applying for income protection with a pre-existing medical condition and they are as follows:
- Accepted at Standard Rates - Your income protection insurance application is accepted and the premium you pay matches the initial quote you received
- Accepted with a Rating/Loading applied - Your income protection insurance application is accepted, however, an increase to the proposed premium has been applied. This can be anything from a 50% increase to 300% depending on the type of condition and the severity.
- Accepted with an Exclusion applied - Your income protection insurance application is accepted, however, an exclusion has been applied, usually relating to a pre-existing medical condition. If, for example, you have had bouts of depression where you have had time off of work; rather than increase your proposed premium, an insurer may decide to exclude any claims arising from depression or mental illness.
- Accepted with a Rating/Loading plus an exclusion applied - Your income protection insurance application is accepted, however, an increase to the proposed premium has been applied as well as an exclusion. This would usually only happen if you had a complex medical history and had more than one pre-existing medical condition.
- Policy postponed - Your income protection insurance application is postponed, meaning you would either have to re-apply after the postponement period has been completed, or apply elsewhere. This usually occurs when there are ongoing medical investigations and so the insurance company would rather wait until those investigations have been completed.
- Policy declined - Your income protection insurance application is declined, meaning the insurance company is not willing to provide you with cover. All is not lost as you are still free to apply elsewhere, speak to an independent insurance specialist who can speak to every insurer on your behalf and work out which insurer is best to approach.
The amount you will pay for your income protection insurance will depend on the type of pre-existing medical condition you have and the severity. If your condition is mild and well-controlled, then you may not have to pay an increased premium at all, however, if your condition is more serious and you are on strong medication and had time off of work then you may have to pay a premium that is two or three times more than a healthy person wanting the same cover.
Will my pre-existing medical condition be excluded from an income protection policy?
In truth, it is difficult to say because it will depend on a number of factors including the type of condition you have, the severity, whether you have had any time off of work, whether you take any medication and how well it is controlled. If you have experienced multiple episodes and have had to take long periods off of work then an exclusion would be likely. Some insurance companies may, however, decide to cover the pre-existing medical condition but apply an increased premium instead.
Many people don't realise that you can challenge an underwriting decision and I have seen many cases where decisions have been overturned or changed in light of new evidence. It is also possible to ask an insurance company to exclude a condition, rather than cover it at an increased price. For example, you may suffer from Crohns disease and manage the condition well through medication and healthy living. You may therefore prefer to simply exclude Crohns from your policy and pay a lower premium, as you know your condition better than any insurance underwriter. Asking for an exclusion isn't always possible but is one of the options available to you and so you should speak to an income protection specialist who can talk you through all of these options.
How to get the best Income Protection quote with a pre-existing condition
A mistake that is often made when applying for income protection, is to apply through the insurance company that provides the cheapest initial quote. It is unlikely that the cheapest company at the initial quote stage will provide the best policy once your pre-existing medical condition has been taken into account.
Receiving the initial quote is just the start of the journey. With income protection, it is especially important to look past the initial quote because there are so many different options that can impact the cost of the cover. It is far better to fully understand your pre-existing medical condition and try and match with an insurance company that will offer the best price once it has been underwritten.
The best way to do this is to speak to an independent income protection specialist. LifeSearch is one of the UK's biggest specialist income protection insurance brokers and is skilled at finding the best and cheapest income protection policy for those that have pre-existing medical conditions. You will receive additional help with the application forms as well as help if you ever needed to claim on the policy. Simply complete this short form to get started with no obligation to take things further. Don't forget, you'll qualify for £50 cashback if you take out a policy.
Best income protection insurance providers for pre-existing medical conditions
Below is a list of the top 10 income protection policy providers in the UK, including what type of income protection policy they offer and their most recent claims stats
|Insurer||Types of Income Protection insurance||Claims history|
|Aviva||2 years and full income protection||87.3% (2018)|
|British Friendly||1, 2, 5 years and full income protection||94% (2019)|
|L&G||1 or 2 years and full income protection||82% (2019)|
|LV=||1 or 2 years and full income protection||95% (2018)|
|Royal London||1, 2, 5 years and full income protection||72.2% (2018)|
|Shepherds Friendly||1 or 2 years and full income protection||96.3% (2019)|
|The Exeter||2 or 5 years and full income protection||93% (2018)|
|Vitality||2 years and full income protection||97.8% (2018)|
|Wesleyan||2 or 5 years and full income protection||97% (2019)|
|Zurich||2 years and full income protection||98% (2019)|
For more information about each provider, including the minimum and maximum amount you can insure, check out our article 'Compare the best 10 income protection policies in the UK'
- A pre-existing medical condition can be defined as any illness (or injury) that exists prior to taking out income protection insurance.
- Do not assume that just because you have a pre-existing medical condition that you won't be able to get income protection insurance
- If you have an existing income protection policy, it might be worth getting a new quote to see if it is cheaper now. Premiums have come down thanks to improvements in medical science and technology.
- Find out which insurer is best based on your pre-existing medical condition, don't be tempted to go with the cheapest initial quote
- Speak to an independent specialist, it is likely you will save both time and money
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