Evolving the Income Protection toolkit

 Brianna Saraceno, Protection Propositions Manager at Aviva, spotlights limited payment term Income Protection as a budget-friendly way to strengthen financial resilience for clients.

When it comes to building financial resilience, Income Protection (IP) remains one of the most powerful tools in an adviser’s protection toolkit. It’s designed to do one thing exceptionally well - replacing a proportion of lost income when illness or injury prevents a client from working.

And it works. According to our Aviva 2025 Claims and Wellbeing report, the average IP claim lasts 6 years and 9 months [1], a clear reminder of the long-term value this cover provides. For clients facing extended periods off work, IP can be the difference between financial stability and hardship.

But it’s not just about duration, it’s also about maintaining the value of that benefit over time. That’s where indexation, plays a vital role. Imagine a client who began receiving an £800 monthly benefit aged 23 in 1986. Without indexation, that amount would have lost significant purchasing power. With it, the benefit keeps pace with inflation, ensuring the cover remains meaningful throughout the life of the claim. In fact, our longest-running claim has now exceeded 39 years, proof that indexation isn’t just a nice-to-have, it’s an essential part of cover.

Consumer interest in Income Protection is on the rise. According to Swiss Re, IP sales grew by 18.4% year-on-year between 2023 and 2024 [2], a clear sign that awareness and demand are building. Our own research at Aviva reinforces this trend: nearly one in three Gen Z consumers would actively consider taking out an IP policy, with three-quarters showing at least some level of interest [3]. This growing engagement signals a shift in how younger generations are thinking about financial resilience and the role protection plays in their future planning.

Meeting clients where they are…

Despite its strengths, traditional full payment term IP, which would pay a valid claim through the policy’s expiry date (typically at retirement age), isn’t always accessible for every client. Common barriers include:

• Cost: Cover to state retirement age (66+) can be expensive, especially for those with limited disposable income or those with higher risk occupations.
• Relevance: For clients just starting out perhaps saving for a deposit or managing student debt, long-term cover can feel like a distant priority.
• Underwriting: Clients with more complex health and personal circumstances may be faced with an increased premium, which can discourage them from proceeding if budget is already a factor.

So, what happens when traditional full payment term IP isn’t suitable? That’s where limited payment term Income Protection steps in.

Limited Payment Term IP: A flexible tool

Limited payment term IP is designed to provide temporary income replacement, typically for 12 or 24 months per cause of claim. It’s a more affordable, accessible option that’s gaining momentum in the market.

Limited payment term IP is particularly appealing to:

• Younger clients who want protection but are balancing tight budgets.
• Self-employed or manual workers without access to employer sick pay.
• Clients who want to fit IP into a protection menu plan, tailored to their budget without compromising on core cover.

Clients who select a limited-term claim period on an IP product may still have access to the additional support features designed to help aid recovery and returns to work, e.g. rehabilitation support.
 

What makes limited payment term IP different?

• Shorter claim duration: 12 or 24 months per claim.
•  Lower premiums: More accessible for clients starting out.
• Multiple claims allowed: Provided the client returns to work between claims.
•  No offset from state benefits: Simplifies budgeting and planning.
   

A complement, not a replacement

Limited payment term IP isn’t a substitute for full payment term cover, but it’s a valuable addition to your protection toolkit. It can serve as:

•  A stepping stone for clients who can’t yet afford full-term cover.
• A budget-friendly safety net for those most vulnerable to income shocks.
• A conversation starter that keeps protection on the agenda.

Many advisers also find success pairing Critical Illness (CI) cover with limited payment term IP. The CI lump sum can help with one-off costs like home modifications or private treatment, while IP supports monthly expenses during recovery.

Tailored protection for every client

For any advisers, the role is to build menu protection plans that reflect the real lives, goals, and challenges of clients. Full payment term Income Protection remains the gold standard, offering enduring financial support and the ability to maintain benefit value through indexation, even across decades-long claims. It’s the most comprehensive solution for clients who need lasting security.

But not every client is ready, or able, to commit to that level of cover and the associated cost, from day one. Limited payment term IP isn’t about doing less, it’s about doing what’s right for the client, right now. It gives advisers more flexibility, more options, and more ways to meet clients where they are.

In a world where financial resilience is more important than ever, limited payment term IP is another essential tool in your protection toolbox, helping bridge the gap between today’s realities and tomorrow’s plans. 

Sources:

•            [1]  Aviva 2025 Individual Protection Claims and Wellbeing Insight report

•            [2] Swiss Re Term and Health Watch, May 2025

•           [3] Aviva Gen Z Insight Debrief, Brand Potential, Feb 2024