Bright Grey’s revamped income protection plan now uses only own occupation disability definitions. There are two of these – the decision of which one applies being taken when the plan is underwritten. The first is the standard industry definition. The second applies own occupation for the first year of the claim, then moves to failing three out of nine everyday tasks or having one of seven illnesses. The illnesses are blindness; cancer; complete dependency; deafness; dialysis; organic brain disease, and terminal illness.
Bright Grey has also widened the number of occupations where it is prepared to offer an own occupation definition by 323 occupations. The insurer says, based on an analysis of past applications, 95% of clients should now qualify for own occupation (an increase from 65% previously), 2% will get the one year definition and 3% will be declined.
The plan pays up to 50% of income, up to a maximum of £12,500 a month. The income benefit can be level or rise by a fixed rate (2-5% a year) or based on changes in the Retail Prices Index (where that is between 2% and 10% a year). The plan is available up to age 60 at outset and lasts to age 64.
Deferred periods are 4, 13, 26 or 52 weeks. The benefit payment period can be one or two years or full term. Bright Grey’s connect claim period has been increased from 26 to 52 weeks and commission has been increased by an average of 17%, bringing it onto line with that on Bright Grey’s other menu plans.
Joint life cover is available (unusual on income protection plans). In terms of non-financial benefits, practical and emotional support is available through RED ARC and by rehabilitation case management provider HCML.
What They Say
Senior product development manager Jennifer Gilchrist said: “By providing an element of own occupation, a serious illness list, as well as everyday tasks, we are making it easier for customers to claim and increasing customer confidence in income protection.”
What We Say
"There has been a growing view that non-own occupation disability definitions should be avoided at all costs. That makes sense, as they can make it much harder for people to be able to claim.
"However, there are some occupations where ‘own occ’ would simply be too great a risk for the insurer so, in such cases, the insurer will typically offer a (much) less generous definition or simply refuse to cover that individual.
"Bright Grey’s solution has been first to look to widen the number of occupations it will offer own occ on. Then to introduce a one year own occ definition that effectively limits its risk but will still help the majority of claimants whose claim is unlikely to last longer than a year anyway. Of course, that still leaves about 1 in 30 clients that Bright Grey won’t offer terms for at all. In that case, this plan won’t make the shortlist of plans to consider.
"Other more minor changes add up to a useful step forward that also makes IP a bit easier to sell and to trust – and that has to be a good thing too."