Royal London has made a series of updates to strengthen and expand the flexibility of its income protection (IP) product.

The insurer says its changes make it easier to claim, with features specifically for the self-employed, and payout limits across the board that reflect today’s higher living costs.

Royal London has introduced an income replacement guarantee which will allow customers to claim up to £1,750 every month, rising to £3,500 for doctors and surgeons, helping to support changing employment patterns.

IP insurance improves financial resilience by providing a percentage of an individual’s regular income when they are unable to work due to illness or injury.

Royal London has introduced changes that strengthen the financial safety net for those who are their own boss by improving the flexibility around fixed costs. Instead of asking to see evidence, such as lease agreements, office rental payments or phone contracts, over a three-year period, the insurer will now require just 12 months of costs.

Against a backdrop of the higher costs that households have faced in recent years, Royal London has increased its replacement ratios so claimants can receive a pay out with a higher percentage of their salary. The changes mean policies now pay 65% of the first £60,000 of the customer’s salary plus 50% of the remaining amount up to £250,000 as a monthly benefit when the policyholder is too ill to work. This means that someone earning £60,000 can now receive up to £3,250 a month, up from £2,875 previously.

Jennifer Gilchrist (pictured), protection specialist at Royal London, said: “The pandemic followed swiftly by the cost-of-living crisis has impacted almost everyone’s everyday finances. It has focused people’s minds on the need for longer-term financial resilience and protecting themselves and their loved ones should hard times hit.

“In doing so it’s been a catalyst for people seeing the importance of protecting their income and, as a result, income protection sales have seen double digit growth. This could be income protection’s coming of age moment.

“Looking at the market there’s a completely underserved group with a huge income protection gap – the self-employed. The latest figures show over one in ten workers or 4.25 million workers in the UK are self-employed, yet only a tiny fraction are protecting their income. That’s why it’s so important that we as an industry continue to work together to promote the benefits of income protection and why we’ve strengthened our proposition to help broaden the appeal of a solution that has flown under the radar for too long.

“We hope that as well as creating a greater awareness, making propositional changes that better serve this group can help address the gap.”