Zurich Income Protection [REVIEW]

Who Are Zurich?

Zurich was founded in Switzerland in 1872 and is now one of the world’s largest companies. It operates in more than 215 countries and territories and employs around 55,000 people worldwide.

As a leading multi-line insurer, it provides Life Insurance policies and a range of other wealth-related services, including Zurich Income Protection Insurance.

It has won multiple awards for outstanding service and insurance products, including consecutive awards from FT Adviser for its online customer service.

Zurich offer an increased minimum benefit guarantee for doctors and surgeons of £3,000 and an NHS sick pay guarantee. It’s therefore one of the insurers we consider for NHS workers.

Rauri Taylor
Independent Protection Expert at Drewberry

Zurich’s Income Protection

Policy Overview

• A flexible policy that offers an extensive range of additional benefits on top of cover
• Choice of payout period — choose either full term cover or a 2 year budget option
• Option of a 104 week deferred period—one of the longest available
• Offers specialised cover for doctors and surgeons with a minimum benefit guarantee of £3,000 and an NHS sick pay guarantee.

What Does Zurich’s Income Protection Select Cover?

The Key Benefits Of Zurich Income Protection

Career Break

If you want to take a career break, you can reduce your cover down to as little as £250 a month. This in turn reduces premiums, making them more affordable while you’re not working.

You can do this for up to 12 months and once you return to work you can increase your cover to what it was originally.

NHS Sick Pay Guarantee

Zurich’s dual deferred period of 26 and 52 weeks allows NHS doctors and surgeons to align their payout with NHS sick pay.

When you choose this option, Zurich pays a proportion of your benefit after your NHS sick pay drops to half pay, rising to 100% of your benefit when it stops completely.

Zurich will also flex its deferred periods for those who have worked in the NHS for less than 6 years to ensure their income starts when they start to receive reduced sick pay, whenever this might be.

Minimum Benefit Guarantee

As with all insurers, Zurich assesses your entitlement to a benefit based on your salary just before a claim. If your earnings have fallen between you taking out the policy and needing to claim, you’re typically therefore entitled to a smaller benefit.

However, Zurich’s minimum benefit guarantee promises to pay the lower of your chosen monthly benefit or £1,500 per month even if your salary dips to below what it was when you took the cover out.

You must be working at least 16 hours a week prior to becoming incapacitated to make use of this.

When offering Income Protection for doctors and surgeons, Zurich doubles this benefit guarantee to £3,000.

Automatic Waiver of Premium

If you’re unable to work due to illness or injury, Zurich starts paying your premiums for you. It does so after the earlier of 13 weeks passing or you reaching the end of your deferred period.

Indexed Cover Available

Zurich gives the option of index-linked Income Protection. This means you can choose to have your cover increase each year in line with inflation based on the Retail Price Index (RPI).  Zurich limits any increases to a maximum of 10% each year.

There is also another option which allows you to increase your benefit amount by a fixed percentage of 3% or 5% each year.

In either case, it’s important to remember that your premiums will also increase along with your benefit to compensate for your higher level of cover.

Milestone Benefit

Zurich refers to its guaranteed insurability option as a ‘milestone benefit’. When certain life events occur, you can increase your cover without needing to answer any further questions about your health. These events include:

• Taking out a new mortgage / increasing existing mortgage
• Marriage / civil partnership
• Divorce / separation / dissolution of civil partnership
• Starting a family
• Getting a pay rise of 10% or more.

Additional Benefits

Zurich Support Services

Access to an independent team of counsellors, advisers and experts to give guidance and support on a range of different areas, including:

• Legal support
• Debt and money management advice
• Emotional and mental health support
• Career and employment guidance
• Relationship advice and support
• Support and guidance after the loss of a loved one.

Multi-Fracture Cover (Additional Cost)

If you suffer a specified fracture, dislocation, tear or rupture, Zurich pays a lump sum of either £2,000, £4,000 or £6,000.

This payment is designed to help support your treatment and recovery. There are some exclusions for certain hazardous sports, such as horse riding or mountain biking. The maximum you can claim in any 12 month period is £6,000.

Maternity, Paternity and Adoption Benefit

If you take maternity or paternity leave, or take time off work to welcome an adopted child into your family, Zurich will cover you as though you are still working. This means that if you fall ill or are injured while on parental leave, you can claim Income Protection benefits.

House Person Benefit

You can receive Income Protection benefits even if you’re not in paid employment at the time of making a claim. Provided your incapacity is severe enough to prevent you from carrying out certain acts of daily living, you can claim the lower of 80% of your pre-incapacity salary or £1,500 per month.

In order to be eligible for this benefit, you must have been in paid employment when you took out your policy.

Trauma Benefit

If you suffer from certain traumatic conditions during your policy term, such as deafness or limb paralysis, Zurich pays out a lump sum worth the lower of 6 times your monthly benefit or £50,000.

Family Carer Benefit

If you need to stop working to take care of a spouse, partner or child who is unable to look after themselves, Zurich pays up to £1,500 a month for a maximum of 12 months.

Hospitalisation Benefit

Should you need to stay in hospital for a period of time, after the 7 consecutive nights Zurich pays £100 per night for up to 90 nights.

Needlestick Benefit

If you contracted Hepatitis B or C or HIV as a result of a needlestick accident at work, Zurich pays a lump sum of the lower of six times your monthly benefit or £50,000.

Funeral Benefit

If you die during the policy term, Zurich pays out the lower of six times your monthly benefit or £10,000 to your loved ones to cover the cost of a funeral.

Key Comparison Points

High Maximum Age Of Entry

Zurich’s maximum entry age (the highest age you can be at the start of your policy) is 64 which, alongside British Friendly, is the highest of any Income Protection insurer.

Most other insurers cap it at between 58 and 60. Zurich may therefore be a more suitable option than some other providers if you’re an older individual who is still working and seeking Income Protection.

Cover Specifically For Doctors And Surgeons

If you are a doctor or a surgeon working for the NHS, Zurich offers many benefits and options that are relevant to you. This includes:

• A minimum benefit guarantee of £3,000 rather than £1,500
• A dual deferred period / NHS sick pay guarantee so that when your NHS sick pay falls to half pay your Income Protection kicks in to top up your reduced earnings.

104 Week Deferred Period

Zurich, like Aviva, is one of the few Income Protection insurers to offer policyholders a 104 week deferred period.

This is one of the longest in the industry and a good option if you get an extended period of sick pay or have significant savings / investments to fall back on. This is because longer deferred periods significantly reduce premiums.

Zurich Standard Income Protection Option

As well as its Income Protection Select policy, Zurich also offers a standard Income Protection plan. While this offers the same core cover, it doesn’t include the additional benefits listed below, making it a cheaper option.

If after selecting the standard policy you decide you would like the additional benefits that come with Select, you can add them to your policy at any time for an extra cost. You can also choose to add Multi Fracture Cover to your policy for an additional monthly premium.

Additional benefits not included with Zurich’s standard Income Protection include:

• Family carer benefit
• Funeral benefit
• Hospital stay benefit
• Needlestick benefit
• Trauma benefit.

It’s worth noting that there are insurers that include benefits, such as needlestick injury protection for NHS workers, a hospital stay benefit and a funeral payment with their standard plans at no extra cost.

Paying extra to choose Zurich Select over its standard plan simply for these additional benefits could therefore be a false economy given some insurers offer them as standard without you needing to pay more.

High Fracture Cover Cost

While Zurich does offer the Multi-Fracture benefit, it costs £6.90 a month extra. This is the highest price to add this compared to other insurers offering this benefit (with some providers even offering a similar benefit for free).

Compare Income Protection Quotes & Get Expert Advice

As you can see, when looking to compare Income Protection Insurance there are lots of points to consider. With so many factors and a lot of different terminology at play, it can be tricky to do an accurate like-for-like comparison between providers.

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For help and fee-free advice on Income Protection, please don’t hesitate to get in touch. You can reach us on 02084327333 or email help@drewberry.co.uk.