Full term income protection is a UK insurance policy that provides a regular, tax-free income if you’re unable to work due to illness or injury, continuing until you recover, retire, or the policy term ends - typically age 65 or 70. It’s designed for long-term support, unlike short-term policies that might end after 1-2 years. In 2023, £579 million was paid out in individual income protection claims, with full term options providing extended coverage for those unable to return to work ABI, 2023.
How It Works
- Duration: Payments persist as long as you’re medically unable to work, up to a set end date - often retirement age, such as 65 or 70, a common industry standard Legal & General, 2025.
- Eligibility: A UK medical professional must verify you can’t perform your job or a similar role, per policy definitions.
- Coverage Scope: Replaces a portion of your income - typically 50-70% - to sustain you over potentially decades-long periods.
Spirit’s Features
Spirit Cover includes full term income protection with:
- Trust Option: Policies can be placed in a trust at no additional charge, potentially reducing inheritance tax liability (40% over £325,000 HMRC, 2024), based on individual tax circumstances.
- Additional Benefits: Features like Physio Support or GP 24/7 are standard, subject to policy terms.
What to Know
- Unlike short-term plans (e.g., 12-24 months), full term extends coverage to retirement if necessary - suited for prolonged or permanent conditions.
- Pre-existing conditions may impact claims if not disclosed - full health history is required at application.
- In 2023, sales of new individual income protection policies reached a record 247,000, showing growing demand for long-term options ABI, 2024.
Why It Matters
It offers extended security for unpredictable health setbacks. Ask your Spirit adviser for specifics on our full term coverage - no guesses, just facts.