Protection in the United Kingdom

Life insurance and income protection in the United Kingdom


In the UK, the state benefits for bereavement or incapacity to work due to illness or accident are minimal. Therefore taking out private insurance policies, such as life insurance and income protection, is the only option to ensure you receive an acceptable level of financial protection following a critical life event. Below you can find more information on the British financial protection market and Expat Assure’s recommendations regarding life insurance and income protection.

UK State Benefits in relation to income protection, death and unemployment
1. Benefits in case of illness or accident affecting your ability to work

You can get financial support and work-related support through the Employment and Support Allowance (ESA) if an illness or disability affects your ability to work.

In the event of a long-term illness or if you are permanently disabled, the maximum you will receive is £73.10 per week for a period of 13 weeks following your claim.  After these 13 weeks your situation will be reviewed. Even with a very severe disability, your benefit amount will not excess £186.90.

The allowance also takes your savings into account. If you have savings higher than £6,000 you will get less than the amount stated above. If you have savings over £16,000, you won’t qualify for income-related Employment and Support Allowance.

2. Bereavement benefits
  • Bereavement allowance : this allowance is granted for a maximum of 52 weeks, and is available only if you have been widowed between the ages of 45 and the State Pension Age. The amount allocated depends on your age. The maximum you may get is £112.55 per week.
  • Widowed Parent’s Allowance: This is granted to those who are below legal pension age and who are responsible for at least one child.The maximum allowance is £112.55 per week.
  • Bereavement Payment : If your partner dies due to an accident or illness, you may be eligible for a tax-free lump sum payment of £2,000.

The amount of bereavement benefits allocated depends on your partner’s overall level of National Insurance contributions. This information is worth keeping in mind for expats: if your partner had been residing in the UK for a short period of time, the bereavement allowance may be reduced or not granted at all.

3. Unemployment benefits

The Jobseeker Allowance is a maximum of £112 per week.

What type of cover can be offered to employees by UK companies?

Some British companies offer their employees protection cover as part of their employee benefits scheme. This could include:

  • Life insurance: the amount of cover will usually vary between 1 – 4 times their salaries.
  • Income protection: will pay out a regular income if you are unable to return to work due to sickness or accident. It is a company benefits not as frequently provided as Life Assurance. When it is provided, it usually varies between 50% and 66% of their salary. Contrary to an individual policy, these benefits are fully taxed in the hands of the employees.

As UK employers are not obliged to offer these types of benefits, the level of cover differs quite significantly between employers in the United Kingdom.  Even if your employer is offering protection cover it is important to keep in mind that the cover is likely to cease once you leave the company or the United Kingdom. If in the meantime you have developed a serious medical condition it will be very difficult to subscribe to a new individual life insurance policy or income protection plan, as the insurance company may not be willing to accept a policy with a higher rate of risk.

At Expat Assure we believe that it is not in the best interest of mobile individuals and therefore we only advise on individual policies that you will not be affected if you change jobs or country and will protect you and your family should the worst come to pass.

What options do you have?

If you are an expat anywhere in the world we have solutions for your life term insurance and income protection either in euros, in US dollars or pound sterling.

If you are a UK resident, a local UK policy (in pound sterling) is usually a better solution than an international policy for the following reasons:

  • The policies are cheaper and guaranteed not to increase during the term of the policy.
  • When you leave the UK you may continue with your policy without additional premium and continue to be covered in most countries worldwide.
  • For tax efficiency, we can prepare, without additional cost, to have your policy written in trust (this is suitable only for life term assurance).
  • If you are a company director, on top of the other above benefits listed above, for your life insurance, we can arrange to have the policy premiums tax deductible from your company normal expenses. The capital insured could be as high as 20 times your total emoluments (salary + bonuses + dividends)

Apart from life insurance, as a UK resident, you may get excellent value for money insurance for:

  • Income protection.
  • Unemployment cover.

Expat Assure can help you to find the best local or international protection policy for you. Give us a call to discuss your needs or complete our proposal request form and we will get in touch.

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We build partnerships with reputable insurance companies who are long-established in the expatriate insurance industry. All the international insurance companies we work with have both individual and corporate plans. Find out more about our partners here.

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