AIG’s new IP product aims to offer best in class features and benefits and a key feature is using early adoption services to help customers recover faster and get back to work quicker.
Available as part of its menu plan, which also includes life cover and critical illness cover, some of the new plan’s main benefits are:
* Rehabilitation support is built in. This discretionary benefit pays up to three times the monthly benefit and reimburses costs such as physiotherapy, counselling and help travelling to work. The services need to be agreed by AIG Life.
* A two year limited payment term option.
* Guaranteed Benefit of £1,500 a month (customers don’t have to prove their income up to this amount at claim).
* Family Carer benefit (pays £1,500pm after three months), Trauma benefit (pays the lower of six times monthly benefit or £50K on diagnosis of blindness, deafness, loss of hands/feet, loss of independence, loss of speech or paralysis of limbs) and Hospitalisation benefit (pays £100 a night after six nights in hospital and pays up to 90 nights in total).
* Terminal illness (advance payment). This pays 12 times the monthly benefit on diagnosis of a terminal illness.
* Death benefit. Pays a lump sum of £10,000 on death.
* Guaranteed insurability options. Options to increase by up to 50% on marriage; having a child; promotion at work, and mortgage increase.
* Waiver of premium is built in.
The plan is available for customers aged 17-54, with a maximum end age of 70. Deferred periods of 4, 8, 13, 26 and 52 weeks are available. Three disability definitions may be used – own or suited occupation and work tasks (daily activities).
The maximum annual benefit is £250,000 a year, for someone earning £530,000pa or more. Maximum benefit is 60% of the first £30K of income, 55% of the next tranche to £100K and 45% of any excess above that.
As with most of AIG Life’s products, Income Protection also includes Best Doctors, Winston’s Wish and the Funeral Pledge.
What They Say
Intermediary director Vicky Churcher said: “The financial benefits of income protection are obviously the main reason advisers recommend income protection to their clients. But I believe our new product stands out in the market because people want to get better quicker and they want to return to work as soon as possible. Our early intervention rehabilitation support service starts during the deferred period and can help speed recovery. Rehabilitation support services should be an important consideration as well as the financial benefits when an adviser makes an income protection recommendation.”
What We Say"IP, along with most other long term protection products, is going through a subtle but important change, with much more emphasis being placed on what might be referred to as ‘help insurance’ benefits, not just purely financial ones. AIG Life is one of the leaders in this area with benefits such as Best Doctors offered for most of its plans.
"With its new IP plan, it goes a stage further, emphasising rehab too. Rehabilitation has long been a tool for good, but too often the emphasis has been on the benefit to the insurer (helping a customer get back to work earlier saves claims cists) rather than to the customer. What rehab really offers customers is the ability to get back to their best as quickly and effectively as possible, and being able to carry on working is part of that.
"Wearing my ‘hard’ consumerist hat, I should point out that such benefits have to be approved by AIG Life and also that services such as Best Doctors are not mentioned in the Cover Details document at all. However, both are reasonable in practice, not least because the T&Cs have to cover decades not just a single year, and AIG Life will be judged by what it does in practice. One safeguard might be to appoint an overseeing body to ensure such claims benefits are handled fairly, but that risks over-complication and bureaucracy.
"Otherwise, generally the plan includes most of what you’d expect – and that’s a good thing too. More options could be offered (e.g. a choice of short benefits period terms) but again that risks over-complication. As always, price (and competitiveness always varies from case to case), underwriting and service will be key factors too (and claims handling is increasingly an element too), but the plan looks to have the potential to make it to many adviser shortlists. The focus on rehab may become a key tool to help get the IP message across even more effectively than before too."