Income protection - other income affecting payout level

busy_dad

Morning,
Just trying to get my head round a query re income protection (accident and sickness).

In the T&C's of policies it says that other sources of income are taken into account and may reduce the amount of benefit paid.

I'm trying to work out if this is based on the maximum benefit (i.e. based on pre-incapacity earnings) or the monthly benefit you are covered for.

For example, take out a policy to cover £2000 pcm.
Your earnings go up and at the time of incapacity 60% of earnings would be £2500 pcm.
You also get an Ill health pension of £500 pcm.

In this scenario, would the insurer still pay £2000pcm as this plus the Ill health pension don't go above the 2500 maximum benefit at the time or would they knock off the 500 you get from the pension regardless?

I am fairly certain it is the former, but just trying to ensure I am not over insured.
Thanks

huckster

They will adjust amount so in the event of a successful claim it is in line with their terms and conditions. They should really have provided examples of how they would treat any claim, so it is clear.

As we cannot see all the terms/conditions on the documents you have in front of you, it is difficult to comment.

Suggest you phone the company concerned and ask them questions. You could send a letter, asking for a clearer explanation than what they have provided to you so far.