British Friendly has introduced this new income protection plan specifically to meet the needs of the adviser market.
The plan includes an “own life” disability definition for all and no premium loadings for occupation, gender or smoking, although not all occupations are acceptable. In general though the plan should appeal to blue collar as well as other workers.
Maximum cover is 70% of gross annual income and P11D benefits (less any State benefits payable, except for the first 12 months of a claim) up to £45,500 a year. Day one cover is available, along with deferred periods of 1, 4, 8, 13, 26 or 52 weeks. Two types of cover are available. On long-term plans, cover can be to age 50-70. On short-term plans, the benefit period is limited to a maximum of 1, 2 or 5 years only. The short-term or budget policies all have a deferred period of four weeks.
There are no standard exclusions, initial waiting periods or policy fees. Guaranteed insurability can be exercised every three years or on certain events happening. Career break options are included and premium reductions apply where a back or mental health exclusion has been applied when the application is underwritten. Claimants are given support through BFS’s health counselling and advisory service.
BFS uses telephone interviewing at the underwriting stage in order to process applications and give decisions as quickly as possible. Quotes can be obtained online and business submitted electronically too, with the ability to track pipeline business in real time. Benefits can be increased automatically (when premiums rise by the same amount) by a fixed 5% a year or in line with increases in the Retail Prices Index (RPI, although this is capped at 10% a year). Annual increases take place each 1 January after the policy’s first 12 months. Premiums are paid on the 1 or 15 day of each month and increase each January in line with age, again only after 12 months (rates are not guaranteed).
In the event of a terminal illness being diagnosed, the deferred period is waived and benefit can be paid straight away. Customers must notify BFS about any change in occupation and also if they change address, if their income falls by more than 10% or if their employment status changes between employed and self-employed.
By way of example premiums, a female newsreader aged 35 wanting £2,000 a month benefit to age 65, deferred eight weeks, would pay a premium of £54.20 a month.
What They Say
CEO Mark Myers said: “We have over 100 years experience of protecting our members and supporting them to return to work. Our new BFS Protect policy will be available exclusively through financial advisers and will build on this proud heritage. Together with an outstanding online experience the proposition will provide the peace of mind our members have always been able to rely on.”
What We Say
BFS may not be known to many IFAs, but it has over a century of experience in this market, which should minimise the all too familiar service risk sometimes apparent with “new” providers. BFS looks to take a very flexible approach but like most providers we’re sure they’re likely to want good risks.
The plan itself looks particularly attractive for clients who are not in class one occupations and those who may want a high percentage of salary benefit.