Formerly known as the Professional Income Protection Plan, this product has been renamed Income One and a number of major changes have been introduced.
- There is no longer a rating for being female. Traditionally, females pay 50% or more for IP but, following the ECJ Test-Achats ruling, that will be outlawed from late next year. Exeter has brought its response forward and brought the plan into line with most PMI and ASU products so far as gender is concerned.
- Customers can now insure 65% of their income up to £60,000 a year, up from the previous 50%. The maximum then reduces to 45% of all income in excess of £60,000 a year.
- The list of occupations has been reviewed and increased. However, the plan continues to target lower risk occupations.
- Customers can now ‘fix’ a proportion of their benefits. This means that that element of the benefit is no longer subject to financial testing when a claim is made. Up to 50% of income can be fixed. This means that someone earning £50,000 a year could have a maximum benefit of £32,500, of which £25,000 is fixed, regardless of income, provided that the customer is still actively employed when the claim is made. Additional evidence of income may be required as soon as the policy starts in order to fix the income.
The plan offers waiting periods of back to day one (after three days off work), 1, 4, 8, 13, 26 and 52 weeks. There are no standard exclusions but personal exclusions may be applied when the plan is underwritten.
Premiums are not level, but rise every year (although rates are guaranteed). Smokers pay 35% higher premiums than non-smokers. Premium rates depend on age and finishing age as well as deferred period and smoking status. Applicants below 55 can complete a full application form or instead a shorter form followed by a tele-interview. Age at entry must be between 16 and 59.
What They Say
Head of intermediary sales Mike O’Brien, said: “The recent ECJ ruling dictates that insurers will all have to make a change if they price their plans according to gender, but we wanted to make that change as positive as possible by taking the opportunity not only to do this, but at the same time make the enhancements that have a positive impact on intermediaries. We asked exactly what they wanted to change and delivered it.”
What We Say
"Unisex rates are a positive move but what really sets this product apart is the ability to fix some or all of the benefit. There are some caveats to this feature, including that it is limited to 50% of income, but it is a big step forward in helping make IP more attractive to both clients and to intermediaries and to avoid potential problems when a claim is made."