Aegon Income Protection Insurance
Royal London acquire AEGON UK’s personal protection portfolio.
The move will see Aegon UK’s portfolio of 400,000 life insurance, critical illness and income protection policies transferred to Royal London.
What This Means for Aegon Policyholders
As of November 2023 the acquisition is in a transitionary stage and Aegon UK will continue to service the portfolio. The acquisition is subject to the formality of a court approval which is expected to see the completion and transfer of all policies to Royal London towards the middle of 2024. It is at this point that Royal London will become responsible for servicing claims and the ongoing management of policies.
Existing policyholders needing to make a claim for Income Protection should call 03456 00 04 93 (Mon – Fri 9am – 5pm).
About Royal London
Where as Aegon UK (the brand name of Scottish Equitable plc) is a 100% owned subsidiary of Aegon N.V. (the publicly traded Dutch multinational), Royal London is a mutual society meaning that it is owned by its members as opposed to shareholders.
In fact, founded in 1861, Royal London is the UK’s largest mutual life, pensions and investment organisation and looks after over 8 million policies.
The fundamental difference of organisations run as mutuals is that they intended to be run with the member’s long-term benefits in mind as opposed to the short-term shareholder satisfaction (profits and dividends).
Because of this, mutual organisations generally promote their services as being more customer-focused with higher service levels, competitive pricing and a stronger awareness of their social responsibility. Another notable mutual organisations in the UK providing income protection insurance is Liverpool Victoria.
For more information see Black Lion’s Royal London Income Protection Review.
Aegon Income Protection Insurance – Information on existing policies
Whilst Aegon UK is no longer providing new Income Protection policies, the information below provides an overview of the terms offered by Aegon. This may be useful to existing policyholders who are considering reviewing their policy. It is always advisable to seek the opinion of a specialist income protection insurance broker such as Black Lion Insurance.
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Aegon Income Protection Insurance – Overview
- Aegon used the “own occupation” definition of incapacity.
- With Aegon, the monthly payment on an IP policy never dropped below £1,500 per month or the amount of cover in the plan.
- Aegon Income Protection Insurance included a waiver of the premium period, subject to residency requirements.
- Proportionate benefit: If a policyholder returned to a less challenging role with a lower income, Aegon topped up the income to the full amount of benefit.
- Rehabilitation benefit: Aegon could, under certain conditions, top up earnings if a policyholder could only return to work part-time.
- State benefits: Aegon took these into account for claims, deducting this amount from IP income to ensure no more than the monthly allowed amount was received.
Aegon Income Protection Insurance – Overview of Key Policy Details
|Guaranteed and Reviewable
|Maximum Claim Duration
|Unlimited (until the policy holder’s death or the policy cease age)
|Own occupation for most occupations
|4/ 8 / 13 / 26 / 52 weeks
|Optional. Capped at a maximum of 10%
|Waiver of Premium
|The lower of 55% of pre-incapacity earnings up to a maximum of £150k per year
|Minimum Entry Age
|Maximum Entry Age
|59. The policy holder must be no older than 70 years when the policy ends
|Minimum Policy Term
|Maximum Policy Term
|If you’re changing your marital status, having a child or increasing your mortgage before 55 years there is no need for an extra medical.
|The lower of £1,500 per month or the amount of cover on the plan.
If income had fallen, Aegon paid the lower of £1,500 or your maximum benefit.
Where the policy’s monthly benefit was lower than £1,500 and at the time of claiming 55% of the insured claimant’s monthly income was at least 90% of the monthly amount, the amount paid will be the benefit amount agreed.
|Self-inflicted injuries resulting in incapacity. Also, residency requirements (refer to policy exclusions below)
Key Points about Aegon
- Income protection cover with Aegon could be started from 18 years old. This was the standard age for insurance products, although some insurers covered young people from the age of 16.
- Aegon had an insurance benefit cap of £150,000 per year. Policyholders would not receive more than this amount. However, some insurers offered larger benefits for higher earners.
- Aegon’s income protection insurance offered a guaranteed benefit. This meant that payments would never be less than £1,500 per month or the cover that was on the plan. This was beneficial because policyholders might have been working part-time (with a reduced income) before they claimed, due to ill health.
- Aegon had a maximum 55% of gross income pre-incapacity earnings pay out. This was lower compared to other insurers such as Shepherds Friendly and British Friendly. Those needing higher cover were advised to consult with experts at Black Lion Insurance.
- Aegon offered long-term benefit, meaning that the pay out would continue until cease age if a claim was made, unless the policyholder died or cancelled the insurance.