Royal London Income Protection UK: How It Works and Deferred Periods

How Royal London income protection works

Income protection is designed to replace part of an earned income when the policyholder is unable to work because of illness or injury. Unlike life cover or critical illness cover, which pay a one-off lump sum, income protection pays a regular monthly benefit for as long as a valid claim continues, subject to the policy terms. Royal London offers income protection that can run to a chosen ceiling age, providing ongoing support rather than a single payment.

The amount of cover is set as a proportion of the policyholder's pre-tax earnings, with insurers applying a maximum percentage so that the benefit never fully replaces a working salary, preserving an incentive to return to work. The benefit is typically paid free of income tax for personally arranged policies. Cover can be arranged on a guaranteed or reviewable premium basis, and some plans index benefits to inflation so the monthly amount keeps pace with rising costs.

Two further design choices shape the policy: how long the benefit will pay out, and how long the policyholder must wait before payments begin. The first is the claim period, which may be short-term, paying for a limited number of years per claim, or long-term, paying until recovery or retirement. The second is the deferred period, examined in detail below.

How deferred periods affect cost and payouts

The deferred period, sometimes called the waiting period, is the gap between becoming unable to work and the date the first benefit payment is due. Royal London, like other UK insurers, offers a range of deferred periods, commonly from around four weeks up to twelve months. The choice has a direct effect on price: the longer the deferred period, the lower the premium, because the insurer pays out later and some claims resolve before benefits ever start.

Selecting a deferred period usually means aligning it with other financial cushions. A policyholder with several months of sick pay from an employer or substantial savings might choose a longer deferred period to reduce cost, accepting that the policy only steps in once those resources run low. Someone who is self-employed or has limited reserves may prefer a shorter deferred period so that benefits begin sooner, accepting the higher premium that comes with it.

• Shorter deferred period: payments begin sooner but premiums are higher
• Longer deferred period: lower premiums but a longer wait before benefits start
• Deferred periods are often matched to employer sick pay or personal savings
• The deferred period applies to each claim, not just the first

What Royal London income protection does not cover

Income protection responds to incapacity caused by illness or injury, so it does not pay out simply because someone loses their job. Redundancy and voluntary unemployment are outside the scope of these policies, which are sometimes confused with short-term accident, sickness and unemployment cover sold separately. As with all protection products, claims can be affected by non-disclosure of relevant medical history at application under the Consumer Insurance (Disclosure and Representations) Act 2012.

The definition of incapacity matters: many policies assess whether the policyholder can perform their own occupation, while others use a broader test. Pre-existing conditions may be excluded, and benefits are capped relative to earnings so a payout will not exceed the agreed percentage of income. Claims are also subject to the deferred period, so no benefit is payable during that initial window regardless of the severity of the condition.

How to make an income protection claim with Royal London

A claim is made by notifying Royal London once incapacity begins, ideally early so that the deferred period and evidence requirements are understood from the outset. The insurer will request medical evidence to confirm that the policyholder meets the incapacity definition, and may ask for ongoing updates while a claim continues, since payments depend on the condition persisting. Keeping records of medical appointments and any employer sick-pay arrangements helps support the claim.

Because income protection can pay out over an extended period, insurers typically review continuing claims and may support rehabilitation or a phased return to work. If a claim is delayed, reduced or declined, the policyholder is entitled to written reasons and can use the firm's complaints process, with escalation to the Financial Ombudsman Service available if the dispute is not resolved.

Is Royal London income protection FCA authorised

Royal London is FCA-authorised, so its income protection products fall under the Financial Conduct Authority's conduct rules and the Consumer Duty, which requires products to deliver fair value and clear terms. Authorisation can be verified on the FCA register at fca.org.uk/register; this review does not quote an FCA reference number, and readers should confirm the current details at the source.

Authorised status brings standard consumer protections, including the potential for Financial Services Compensation Scheme cover on eligible policies and the right to refer unresolved complaints to the Financial Ombudsman Service. These safeguards operate alongside the policy terms, which remain the basis on which any claim is assessed and paid.

Frequently asked questions

What is a deferred period in income protection?

The deferred period is the time between becoming unable to work and the date the first benefit payment is due. Royal London offers a range, commonly from around four weeks to twelve months, and a longer deferred period usually means a lower premium.

Does Royal London income protection cover redundancy?

No. Income protection responds to incapacity caused by illness or injury, not to job loss. Redundancy and voluntary unemployment are outside the scope of these policies.

How much income can I cover?

Benefits are set as a capped percentage of pre-tax earnings, so the payout never fully replaces a working salary. For personally arranged policies the monthly benefit is generally paid free of income tax.

How long does income protection pay out?

It depends on the policy. Short-term cover pays for a limited number of years per claim, while long-term cover can pay until recovery, the end of the term or a chosen retirement age, subject to the policy continuing to be valid.

What can I do if Royal London declines an income protection claim?

You can use Royal London's internal complaints process and request written reasons for the decision. If it is not resolved within eight weeks or you remain dissatisfied, you can refer the case free of charge to the Financial Ombudsman Service at financial-ombudsman.org.uk.