Breathing Space is a simplified income protection plan, only available through financial advisers, that offers:
* No financial underwriting either at application or claim stage.
* Long-term (not annually renewable) plan that offers benefits up to age 65.
* Pays benefits for up to one, two or five years only per claim.
* Four week deferred period.
* Claims paid weekly.
* Maximum benefit £250 a week (£13,000 a year).
* Own occupation cover for all (although cover is not available at all for some occupations, including members of the armed services, professional or semi-professional sports people, police officers and those working at 40 feet or above). Customers must be in paid work at the time of claim, but a career break option allows cover to be suspended for from three months to two years.
* No automatic exclusions.
* Waiver of premium after 28 days of claim payment.
* Automatic benefit increase allows benefits (and premiums) to rise each January by 5% a year or in line with the RPI (Retail Prices Index) up to 10% a year.
*Rates increase with age, on 1 January each year.
Premiums (which are based on age at 30 January, rather than actual age) for £1,000 a month cover for a 35 year old would be £21.50 for a benefit period of one year, £23.50 for two years and £30.00 a month for a five year benefit period.
What They Say
CEO Mark Myers said: “By removing all financial underwriting we are giving advisers an alternative option to recommend to their clients, particularly those who have fluctuating incomes, to provide both simplicity and certainty. Policyholders can be confident that when they claim they will receive the cover they have paid for, as no deductions are made for existing benefits such as sick pay, other insurance payouts or State benefits.”
What We Say
"Simple plans mean compromise - period. The issue is whether by making a product simpler to understand, to sell and to buy, you increase or decrease its appeal and relevance to an individual.
"Breathing Space won’t suit a City high flier with complex protection needs, but then it’s not designed to.
"Where it should appeal is to the average man or woman on modest income who wants to protect their income affordably, in a way they can understand and are comfortable with.
"So, factors such as no financial underwriting, own occupation definition and one deferred period should engender greater trust that the policy will meet their needs. The only variables are the amount of benefit required and the benefit payment period.
"Making the proposition as simple as possible should, therefore, widen the appeal and help make IP more of a priority for the average working family. Where a client needs a more bespoke solution and larger benefits, this will not be the plan for them, but then that’s not its market anyway."