TL;DR
A mutual owned by policyholders, reinvesting profits for member benefits and a personal approach.
Key takeaways
- Member-first: No shareholder dividends.
- Profits reinvested for better products/services.
- Flexible underwriting and claims.
- Self-inflicted, drugs/alcohol, criminal acts, normal pregnancy, war.
- Underwriting-specific (e.g., back pain exclusion).
Full Guide to National Friendly IP
Income protection is the financial bedrock of any sound protection plan. It protects your ability to earn a living with a tax-free monthly income if unable to work due to illness or injury. National Friendly, a member-owned friendly society since 1868, focuses on value and service without shareholder pressures.
This guide covers policy features, suitability, underwriting, premiums, and claims for 2026.
What is Income Protection?
Income protection pays a regular, tax-free monthly income if unable to work due to illness or injury, replacing salary for essentials.
- Statutory Sick Pay (SSP): ~£116/week for 28 weeks max – insufficient for most.
- Employer sick pay: Often limited to months.
- Savings deplete quickly in long-term illness.
Over 2.8 million UK workers are out of work long-term due to sickness.
National Friendly Overview
A mutual owned by policyholders, reinvesting profits for member benefits and a personal approach.
- Member-first: No shareholder dividends.
- Profits reinvested for better products/services.
- Flexible underwriting and claims.
Core Policy Features
Occupation Definition
Offers 'Own Occupation' for many professional/low-risk roles: Pays if unable to do your specific job duties. 'Suited' or 'Any Occupation' for higher-risk manual jobs.
Benefit Amount
£500–£6,000/month (£10 increments), up to 70% of earnings (£2,000 max for 5-year term). Proof checked at claim.
Deferred Period
Options: Typically short-term like 4, 8, 13, 26, 52 weeks (align with sick pay/savings).
Benefit Period (Payment Term)
Short-term focus: 1, 2, or 5 years max per claim.
| Feature | 1/2-Year Term | 5-Year Term |
|---|---|---|
| Purpose | Short/medium incapacity | Longer-term claims |
| Max Benefit | Up to £6,000/month | Up to £2,000/month |
| Cost | More affordable | Higher |
| Best For | Budget-conscious | Extended protection |
Indexation
Optional: Increases cover/premium with inflation (e.g., RPI).
Other Features
- Waiver of Premium: During claim.
- Hospitalisation: Daily cash in deferment (some plans).
- Back-to-work: Proportionate if reduced earnings.
Who It's Best For
- Self-employed/freelancers: No employer sick pay; flexible earnings proof.
- Company directors: Executive IP (company-paid, tax-efficient, up to 80%).
- Employees with limited sick pay.
Example: Self-employed IT contractor (£60k/year) with RSI claims £3,250/month after 4 weeks.
Underwriting
Manual/flexible process:
- Detailed application (health, family history, occupation, finances).
- GP reports for complex cases.
- Outcomes: Standard, exclusions, loadings.
Strong on mental health, BMI up to 40.9, heavy occupations (Cat 4).
Premium Drivers
| Factor | Impact |
|---|---|
| Age | Younger = cheaper |
| Health | Conditions may load/exclude |
| Smoker | 50%+ higher |
| Occupation | Manual > office |
| Benefit Amount | Higher = more expensive |
| Deferred Period | Shorter = higher |
| Benefit Period | Longer = higher |
Illustrative (non-smoker, office worker, £2,000/month, 13 weeks defer, age 65 cease):
| Profile | 2-Year Term | Full Term (if avail) |
|---|---|---|
| 30yo office | £12-£18 | £28-£40 |
| 40yo office | £18-£26 | £50-£70 |
| 30yo manual | £25-£35 | £65-£90 |
Illustrative only; get personalised quotes.
Claims Process
93.7% payout rate (2023 data); straightforward.
- Contact claims team when deferment nears.
- Complete form.
- Provide medical/financial evidence (insurer arranges GP reports).
- Assessment.
- Monthly payments post-deferment.
Advisers assist for smooth process.
Exclusions
- Self-inflicted, drugs/alcohol, criminal acts, normal pregnancy, war.
- Underwriting-specific (e.g., back pain exclusion).
Market Comparison
| Feature | National Friendly | Major Insurers |
|---|---|---|
| Structure | Mutual | PLC |
| Underwriting | Manual/flexible | Automated/manual |
| Benefit Term | 1/2/5 years | Often to retirement |
| Best For | Self-employed/short-term | Broad/long-term |
Expert Verdict
Strengths: Affordable short-term, flexible underwriting, mutual focus. Consider for budget/self-employed. Compare market for best fit.
FAQs
Pre-existing conditions?
Taxable?
2-year vs full-term?
Get a Quote
Contact WeCovr for free whole-market comparison.
Disclaimer: This is general guidance only and does not constitute formal tax or financial advice. Tax treatment depends on individual circumstances, policy terms, and HMRC interpretation, which cannot be guaranteed in advance. Whenever applicable, businesses and individuals should always consult a qualified accountant or tax adviser before arranging such policies.
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