How protection advisers can help those struggling with the cost of living 

Although it is called a career break, generally insurers do not insist that the client must have stopped working to exercise this option. This option is mainly offered by the friendly societies. Some insurers have something similar, but it tends to be more of a premium reduction option than a full pause of the policy, explains Higgs.

Sabbatical cover 

Here, the policy remains in place at the full benefit amount and premiums must still be paid. The client, in this instance, must have stopped working and taken a career break. If the client falls ill and claims during that time, they would be assessed and covered as though they were in work, on the employed own-occupation definition.

Typically this benefit is only offered on specific occupations such as the medical profession, however this will vary across providers.

The benefit payment would be based on their income prior to taking the break. Some insurers offering this option do not have any cap on the maximum claim duration or benefit paid. Others might cap it at, say, 12 months, says Higgs.

Obviously, the latter option does not involve a reduction of – or complete hold on – premiums, so is perhaps not very helpful in terms of the cost of living crisis, but it is worth understanding the differences between the two regardless.

Some mutuals use their status and their member fund to pay the premiums of clients struggling financially.Adam Higgs, Protection Guru

Career/sabbatical break options are more often available on income protection than on life insurance or critical illness cover, explains Higgs. 

“A number of insurers have used these [career breaks] to potentially support clients in financial troubles, as they enable premiums to be stopped or reduced for a period of time. The downside is that there will be no cover in place either,” he adds.

Something else to be aware of, according to Eddy Edwards, head of brand for DeadHappy, is that if the client gets more than six months from the point of underwriting or the premium reduction, there might be no guarantee they can increase their cover to where it was without answering some health questions again.

Premium holidays

The second aspect is the support that providers initially put in place in response to the Covid-19 pandemic, perhaps to help those on reduced pay due to furlough. Although a temporary offer at the time, some providers have continued to offer premium holidays in response to the cost of living crisis.

“This is a mix of things with varying benefits,” says Higgs. “Some mutuals use their status and their member fund to pay the premiums of clients struggling financially. This is really positive as cover remains in place.