Content Writer
Former Senior Protection Advisor
If you’re looking at different types of income protection insurance, you may have noticed various premium pricing structures. One of these variations is age banded income protection, where your premiums adjust over time. Here, we’ll cover what this means, how it compares to other policies, and where to get an accurate quote.
What is age banded income protection?
With this type of income protection, your premiums increase as you get older. In most cases, at yearly intervals, but sometimes it’s every 5 years. The key benefit of age banded income protection is that the premiums can be more affordable at the start of your term when you’re younger due to the reduced risk of a claim.
How does it work?
With age banded income protection, the policy premiums adjust based on your age. This means you can start off with lower premium payments when you're young, and premiums go up at specified intervals - every 1 or 5 years, for example.
If you’re unable to work due to illness or injury, the policy pays out a percentage of your salary as a regular monthly payment (usually 50% - 75%). Although your premiums increase over time (as your risk of claiming increases), your salary may also increase over time, making the higher premiums proportionately affordable.
How it compares to other policy types
Here’s a quick comparison showing how age banded income protection compares to other forms of income protection, like guaranteed or reviewable premiums:
|
Policy type |
Premium structure |
Initial cost |
Long-term cost |
Best for |
|
Age banded |
Increases at pre-agreed ages |
Usually cheaper |
Increases over time and can work out more expensive than guaranteed premiums in the long run |
Those looking for affordable cover in younger years and are willing to accept higher costs later |
|
Guaranteed |
Fixed throughout the policy |
Usually higher |
More predictable and stays the same over time, provides better value in later years |
Those who want long-term security and predictability for financial planning |
|
Reviewable |
Insurer reviews and adjusts periodically |
Usually cheaper |
Can be unpredictable with premium increases at the insurer’s discretion |
Those looking for cheaper cover in the short term and willing to accept fluctuations |
Examples of cost comparison
Here are some rough examples showing how premiums for each of these income protection policies compare over time for a non-smoker earning £40,000, with a £2k monthly benefit (60%), paying until retirement with a 30-day deferred period:
|
Age |
Age banded monthly premiums |
Guaranteed monthly premiums |
|
25 |
£32 - £35 |
£28 - £40 |
|
35 |
£35 - £42 |
£28 - £40 |
|
45 |
£56 - £78 |
£28 - £40 |
|
55 |
£109 - £147 |
£28 - £40 |
|
65 |
£197 - £230 |
£28 - £40 |
It’s difficult to show accurate examples of reviewable premium costs because, along with your initial level of cover, these premiums adjust based on your claim history, the performance of underlying investments, and other provider-specific factors which are impossible to predict or forecast.
Get an age banded income protection quote online
Finding an affordable age banded income protection policy can be complex. The most suitable type of protection depends on not only your age, but how much cover you need, lifestyle factors (like whether you’re a smoker), and much more.
Our specialist insurance advisors can provide accurate, tailored quotes for income protection, regardless of your age. They can quickly assess your needs and then find you the right policy. This might even mean a different type of cover if they think something else is more suitable than age banded income protection insurance.
If you’d like a free, no-obligation chat with an advisor specialising in age banded income protection insurance, you can get started here:
Get your bespoke income protection quote today
What is the maximum age for income protection?
Typically, most long-term income protection policies run until you reach retirement age, which is usually 65 years old. However, a small number will remain valid until 70 years old. And there are specialist policies that will provide cover for as long as you continue to work.
Types of polices available for older applicants
No matter your age, you’ll still have some insurance options available. Here are some examples of the most appropriate policies to consider:
-
Short-term cover: It’s possible to get short-term income protection policies that pay out for 1, 2, or 5 years. They can be much cheaper for older applicants, allowing you to bridge any potential gaps until you retire or start getting a pension.
-
Over 50s policies: Some providers have specific insurance policies designed for over 50s. These policies can be useful because sometimes no medical underwriting is required. But, they usually come with a lower level of cover or limited benefits.
-
Critical illness cover: If you’re older, critical illness cover might be suitable. It pays out a lump sum if you get diagnosed with a serious condition. The lump sum may be more helpful than regular monthly payments because it could allow you to pay off your mortgage, cover medical bills or help your family.
Why choose Teito for your income protection insurance?
Finding the best income protection insurance policy isn’t always straightforward. Your age and personal circumstances will be unique, but expert support ensures you get the right cover at a competitive price.
Our experienced insurance advisors can help you find the most suitable and affordable age banded income protection policy if that’s what they think is most appropriate for your situation and needs.
Here are some more of the reasons people choose us to find them age banded income protection insurance:
-
We can provide tailored quotes for income protection
-
Our advisors have 5-star ratings on leading review sites
-
Your first chat is free, with no obligation to proceed
-
Access to specialist insurers with exclusive deals for all ages
Ready to take advantage of a free, no-obligation chat with an advisor specialising in age banded income protection insurance? Get started here.
FAQs
It depends on the type of policy you have. Some policies will have a fixed term of 1 or 2 years, but more comprehensive income protection stops at retirement age (typically 65 to 70). However, some insurers may offer policies beyond this if you continue working.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.