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How is IP financially underwritten?

08/09/2025

At LV=, we only financially underwrite and need evidence of your client’s income when you submit their application if the benefit amount requested exceeds £12,501 a month for self-employed clients and £20,833 for employed clients. For the majority of cases, we will only ask for evidence of your client’s income at claim stage. 

You might be wondering what sources of income we accept and what we would not consider at application and claim stage. We’ve simplified this for you below, making it easier for you to get cover in place for your clients.

stack of coins on the hand

What sources of income do we accept?

In most cases, at both application and claims stage, we will accept the following sources of income for an LV= Income Protection policy:

  • Employed taxable earned income - This will be the gross figure a customer receives from their employer. It includes any bonus and overtime and can be found on your client’s payslip or P60.
  • Dividends for shareholding directors - You can include any dividends paid to a client as long as they’re not higher than their share of the net profit.
  • Profit after deductions for self-employed clients - Income is their profit after allowable deductions. This will be the figure they declare to HMRC on their self-assessment documentation.
  • Spouse’s dividends - These can be included as income if the spouse is a shareholder in the business and will not take over running the business in the client’s absence. Their dividends will cease during the claim, and they do not have their own IP policy which covers this income.

What would we not consider as income?

  • Turnover - The turnover of a business should not be used as the basis for income for an LV= Income Protection policy.
  • Loans - Loans, such as director loans, cannot be used as they’re not a taxable source of income.
  • Benefit payments - You can’t include any benefit payments received as income.
  • Pension payments - Pension payments are not considered as a source of income.
  • Expenses - You can’t include any expenses that are reimbursed such as travel.
  • Spouse’s salary - Your clients spouse’s salary will not be considered as a source of income.
  • Dividends from a previous period - These will not be considered as income.
  • Dividends from investments - Return on shares from companies that your client does not work for.
  • Profits of a limited company - That have not been distributed as dividends to shareholding directors.
  • Rental income - Unless it forms part of your business.

Making the underwriting process simple for you

How can you navigate the underwriting process smoothly?

To support your client’s application, you can take steps to ensure the process runs smoothly. Before application, always emphasise the importance of an accurate and honest application to your client. At application stage, if possible, it’s a good idea to fill in the application with your client present and make sure your client double checks their information. These steps help avoid misrepresentation so your client can count on their cover.

You may also find our pre-underwriting tool useful to check any illnesses and conditions, allowing you to get instant indicative decisions and set expectations upfront.

Our specialists are on hand to help

Speak to the right person, at the right time – direct access to our specialist teams when you need them. 

  • Dedicated account managers – They’re on-hand to support you with cases.
  • Underwriting experts – Our underwriters can help support you with an application and keep you informed throughout.
  • Large case team – For larger and more complex cases (for cover that exceeds £6,250 a month), our large case team can provide dedicated support.  

At LV= we’re here to help support you through the financial underwriting process with tools and training from our dedicated account managers, to ensure you can protect as many clients’ income as possible. 

Please be aware that this is only a guide and not an exhaustive list, and each client has their own needs and circumstances.

Income Protection

Our award-winning Income Protection comes with a range of benefits and features included at no additional cost, making it easier to recommend our cover.

Explore more on our Income Protection

Pre-underwriting tool

Our pre-underwriting tool is available 24/7 and gives you an instant, indicative decision in seconds.

Use our pre-underwriting tool

Dedicated support

Our dedicated account managers are on hand to help you navigate Income Protection cases that are more involved or complex.

Find your LV= Account Manager