NHS Specific Income Protection Insurance

Losing your income due to illness or injury is a real and constant concern for most people in the UK.  Many families are not lucky enough to have months of savings in the bank and have multiple financial commitments to meet each month including mortgages, utility bills, food, fuel and more.

In our industry we often say…

“If you had a magic cash machine, sat in your living room, which every month like clockwork spat out your monthly salary… would you insure it in case it stopped working? Yes? Well you do have a magic cash machine… it’s you!”

For this reason, one of our most popular products is Income Protection Insurance. This is a policy designed to replace a percentage of your pre-tax monthly income in the event you cannot work due to any illness or injury.

However, for various reasons (including frequency of claims) Income Protection has historically been quite expensive, and for many people in the health sector… these policies have felt out of reach…until now.

How ‘deferred periods’ on Income Protection policies work.

Income Protection policies include something called a deferred period.

In the event you cannot work due to illness or injury, your policy will begin to replace your income after a waiting period called the deferred period. The deferred period is usually equal to your employer’s sick pay period.

For example, if your employer pays you sick pay for the first 2 months off work, then your Income Protection policy would be set up with a deferred period of 2 months. So once your sick pay finishes, your Income Protection policy would begin to replace your income.

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For people with very good sick pay schemes (e.g. 12 months full pay) this allows them to select a 12-month deferred period which makes their policies much cheaper. For people with shorter sick pay benefits (e.g. 2 months full pay / 2 months half pay) they would have to select a much shorter deferred period… which traditionally would result in much higher monthly premiums.

…However for a large number of NHS staff this has now changed!

Introducing NHS Specific ‘deferred periods’!

If you are an NHS medical professional, the sick pay you receive is based on your length of service as shown in the table below:

Years of serviceFull Sick PayHalf Sick Pay
Between 0 and 1 years of service1 month2 months
Between 1 and 2 years of service2 months2 months
Between 2 and 3 years of service4 months4 months
Between 3 and 4 years of service5 months5 months
Between 4 and 5 years of service5 months5 months
5 years of service or more  6 months6 months

With NHS specific Income Protection policies the insurer will now allow you to set up your policy with a 12 month deferred period (vastly reducing the monthly cost to you) but in the event you need to claim they will start paying your claim sooner than this. In fact they will start paying your claim as soon as your sick pay reduces to half pay.

So for example, if the NHS worker covered has been working for the NHS for 1 and a half years, your policy would start paying out after 2 months (once your sick pay reduces to half pay) even though it is priced on the basis of a policy that wouldn’t pay out until 12 months off work.

What does this mean in terms of potential cost savings?*

Normal Income Protection Policy

Male, 35 years old, Non-smoker.

Occupation: nurse (2nd year of service)

Income Protection Policy (paying £2000 per month, deferred period of 2 months)

Monthly premium = £35.52 pm

NHS Specific Income Protection Policy

Male, 35 years old, Non-smoker.

Occupation: nurse (2nd year of service)

Income Protection Policy (paying £2000 per month, deferred period of 12 months, though policy will pay out after 2 months off work)

Monthly premium = £18.29 pm …. 58% cheaper!

*Important: the quotes above are indicative, and any prices will be based on your unique circumstances, occupation, health history and cover levels.

How do I get this NHS specific Income Protection?

This sort of policy isn’t available to all insurance brokers and is only offered by a few select insurers.

However here at Blue Light Insurance we do have access to a number of NHS Specific Income Protection policies.

These policies are available to most nurses, midwifes, doctors, anaesthetists, surgeons and other NHS professionals provided they are on the sick pay structure show in the table A above.

If you have Income Protection in place already, speak to us and you may be able to save over 50% on your premiums. If you don’t have Income Protection in place, then feel free to submit an enquiry here and our friendly advisers will help find you some suitable options.