L&G has introduced a number of updates to its existing IP plan, including:
* A new two year benefit period plan. This offers customers a more affordable option and replaces the previous five year benefit term option. Multiple claims are possible, with each one limited to two years’ payout.
* The maximum insurable benefit has been raised to 60% of the first £60,000 of gross annual income, plus 50% of income in excess of that.
* A Price Beater service has been introduced across the income protection product range (and L&G’s other protection products too). Terms and conditions apply and this option only applies where the insured benefit is between £2,000 and £16,667 (or £8,333 if indexed) a month. Price Beater means L&G will beat the standard premium offered by a competitor on a like-for-like product’.
L&G also offers an income guarantee, whereby if the customer’s income falls, the plan will still pay out the lower of £1,500 a month or the insured benefit if lower.
Cover can be increased under the Guaranteed Insurability Option (GIO), without further underwriting. Other benefits include waiver of premium, hospitalisation benefit, housepersons cover, continuous cover, proportionate benefit, linked claims and life cover. An own occupation definition applies to all customers (except for housepersons). Full and partial premium discounts are included for some mental health and spine exclusions. Premiums are guaranteed throughout the policy term. The plan is available from age 17 (in some cases) up to age 60 at outset and the policy end date can be from age 50 to age 69. Deferred periods can be 4, 13, 26 or 52 weeks and benefits may be indexed (linked to the RPI). Maximum benefit is £200K pa.
What They Say
Steve Bryan, Director, Intermediary, Legal & General, said: "Income protection can play a vital role in the event of ill health or injury by supporting an individual or family through a testing time. Protecting yourself financially against an unfortunate occurrence such as this can make all the difference in helping you safeguard you or your family’s current lifestyle against the financial implications of being unable to work. However, if we want to see more people benefit from these products, we need to drive value for money in the income protection space and broaden the competitive options available to consumers.
"We believe these updates to our Income Protection Benefit plan keep that customer centricity as the focus; enhancing value for money providing an alternative and competitive choice in the marketplace."
What We Say
"L&G’s decision to replace a five year benefit term option with a two year one [rather than to offer both] looks a bit odd – but it keeps things simple and, in any event, two years is a realistic timespan for many clients, where five years is too long.
"The revisions are relatively minor, apart from Price Beater, which takes the company down the supermarket route of looking to always beat or match their competitors on price. L&G has deep pockets, which helps, but this is a reassuring benefit for clients. In reality, it only applies if you come up with a ‘like-for like’ [will that be easy to define in practice?] price elsewhere but IFAs are well positioned to be able to do just that. Will it last or be copied by others. Potentially yes to both – but let’s see…
"All in all the plan offers a good range of benefits and it’s interesting to see how IP is developing into a product where a lot of complexity arises in the selling process, where CI is one where a lot of complexity [potentially] arises more at the claims end."