Afternoon everyone

I have a sole proprietor client who has recently been injured and was out of action for a month. She received a payout from her Income Protection policy and used the funds to cover her monthly expenses. She's VAT registered and her output is Standard VAT.

Does this insurance payout have any VAT implication? If no, then it's easy to deal with. If yes, could we have claimed her contributions as standard rated expenses?

My gut feel has been that this is a disability policy and is therefor considered long term insurance, which has no VAT implications. But I'd rather get some sound advice back from someone who has personal experience with this.

Thank you