Allianz UK has introduced a short-term income protection product offering coverage without medical underwriting, entering a market where regulators continue to scrutinise whether protection products deliver fair value for consumers.
The policy, developed in partnership with AmTrust Specialty Limited and Wessex Group, provides immediate cover through financial advisers and mortgage brokers for individuals experiencing unexpected life disruptions.
The product pays benefits for a maximum of 12 months across three coverage options: accident, sickness and unemployment combined; accident and sickness only; or unemployment only.
Customers selecting accident and sickness coverage receive automatic accidental death cover worth 12 times their monthly benefit amount. The policy does not apply premium weighting for pre-existing conditions when accident and sickness options are chosen.
Eligibility extends to individuals aged 18 to 64 who have maintained full-time employment for at least six months, with coverage terminating at age 67.
The policy covers up to 65% of gross monthly income, with maximum payouts of £3,000 for new mortgages and £2,000 for existing mortgages or customers holding mortgage offers.
The launch comes as income protection sales reached record levels, with new individual policies surging 18% in 2024, Swiss Re's Term & Health Watch report shows. Industry data indicates insurers paid out £204 million for individual income protection claims in 2024, up 16% from the previous year.
Despite this growth, only 14% of British adults hold income protection, research finds, whilst Royal London data indicates eight in ten homeowners paying monthly mortgages lack such coverage.
The Financial Conduct Authority's (FCA) Consumer Duty framework requires firms to demonstrate that products deliver fair value and meet customer needs, with price and value assessments remaining a regulatory priority.
Nearly all individual income protection products (97%) were sold with advice, highlighting the intermediary channel's dominance.
The product arrives as mortgage market conditions improve, with residential house purchase lending totalling £135 billion in 2024, an 11% increase from 2023, UK Finance data shows. Average mortgage interest rates fell to 4.99% in the first quarter of 2025.
Broker-sourced income protection sales accounted for approximately 36% of UK market activity in 2024/25, with protection products comprising nearly 50% of some firms' income as mortgage activity remains sensitive to interest rate volatility.
Henry Topham (pictured above), managing director of retail insurance at Allianz UK, said the company recognises concerns about bill payments when accident, sickness or unemployment prevents work.
He described the policy as complementary to mortgage and protection sales, offering "a vital financial safety net and peace of mind ensuring people and homeowners can maintain their standard of living when the unexpected happens".
