LV= has introduced a number of changes to its income protection proposition aimed at increasing access and giving wider cover. The changes include:
* Introducing Fracture Cover. This pays up to £2,200 for specified bone fractures, the amount depending on the fracture.
* Adding a Death Benefit of £10,000, or £5,000 if they die in the first four years.
Both new benefits are automatically included as part of the contract, at no additional cost, and with no further underwriting or application forms to complete.
LV= has also added:
* A Premium Payment Holiday, which means customers will not need to pay their premiums for up to six months if they are made involuntarily unemployed or leave work to become a full-time carer.
* A Teachers Sick Pay Guarantee to offer simple, tailored income protection payments for teachers who, like many public sector employees, have sick pay arrangements that change depending on length of service. The customer must choose a 12 month waiting period and, as long as their sick pay scheme matches that for a local authority teacher, LV= will pay their benefits early to mirror their employer sick pay arrangements.
* The maximum amount that customers can protect has been raised, so they can now cover up to a maximum of 60% of their earnings.
* The minimum cease age of 50 has been removed. This enables advisers to match the IP benefit to younger clients’ needs and/or a specific mortgage term.
Quotes can be obtained through LV’s new quote and apply system Fastway.
What They Say
Managing director of protection, Myles Rix, said: "Taking out income protection is one of the best ways for consumers to improve their resilience to financial shocks and we recognise that in these current uncertain times our customers need protection against the widest range of possibilities. We’ve listened to advisers’ and consumers’ concerns and extended our cover so it protects against more eventualities. We believe the changes we’ve made will offer wider access, greater certainty and added value, and will appeal to advisers and their clients alike."
What We Say
"LV= has introduced quite a few changes to its well-established IP plan, all designed to both widen and improve cover.
"The new fracture and death benefits mean the plan will pay out in more circumstances, while the new premium payment holiday could be invaluable to those who need to exercise it. Pricing remains unchanged too so, although the new benefits are small, they nevertheless increase the plan’s appeal and also mean more claims being paid.
"Since the virtual demise of MPPI (mortgage payment protection insurance) for new customers due to the years of misselling, long term IP hasn’t really taken up the slack, leaving many homebuyers without adequate cover if they can’t work because of illness or disability. By scrapping the previous cease age of 50, LV= is helping advisers to choose to recommend IP instead of shorter term general insurance based cover. That has to be a welcome move, even if it does mean cover runs out when the mortgage does.
"All in all the changes add up to a useful and wide-ranging series of updates that are both intelligent and of practical value."