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‘Income Protection’ by Legal & General


Generic alcohol and drug abuse exclusions dropped.All are relatively minor changes.
A range of changes that will benefit some clients.IP remains a slower selling product than many protection types.
More competitive pricing will be welcome too.IP can be complex for advisers, especially if they only recommend IP relatively infrequently.

The Product

Legal & General (L&G) has announced a series of updates to its income protection (IP) product, including increased acceptance, more income guarantees and extended support services. L&G says it has also introduced more competitive pricing on its IP products. In detail the changes include:

* Removing the generic exclusion of alcohol and drug abuse.
* Increasing the maximum IP benefit limit from £200,000 a year (£16,667 a month) to £240,000 a year (£20,000 a month). This applies to employed and self-employed customers taking out a plan on a standard or low-cost basis.
* Raising the limit too on increasing IP plans, to £168,000 a year (£14,000 a month).
* Last year (July 2018), L&G introduced special terms for NHS doctors, nurses and surgeons and has now introduced an income guarantee for these individuals, set at £3,000 a month. The original £1,500 income guarantee is unaffected and will remain in place for anyone who does not meet the criteria of being an NHS doctor, nurse or surgeon.
* The Nurse Support Services (NSS) benefit is now available across L&G’s life insurance, family and personal income plans, income protection, relevant life plans and business life insurance intermediary product range. IP customers can access information on the NSS support services at any point in the life of their policy. The service is available to the life insured and to their immediate family, and offers support across a variety of areas such as mental health, bereavement and serious illness.

Existing benefits include guaranteed premiums, a two-year low cost option, stepped benefit (on level and increasing plans), a choice of four deferred periods, income guarantee automatically included, and a range of rehabilitation support services included at no extra cost.

What They Say

Product director Mark Jones said: "Whether it's helping to keep up with mortgage repayments or covering day-to-day costs, income protection really can make a big difference to the lives of customers. "We recognise intermediaries are already doing great work across the country to ensure people have this type of cover and it's our job as a provider to continually ensure that our proposition is of the highest standard."

What We Say

Health Insurance & Protection Technical Editor said Andy Couchman said: "These are all sensible updates that fill gaps, even though none is really revolutionary and many clients will not be affected by most changes. That said, L&G probably doesn’t need to be that radical. It reports too that in 2018 it paid 95% of its IP claims (new and continuing claims), which further helps encourage customer trust. "We haven’t looked in detail at the price changes, but those will be welcome too. "All in all, IP looks to be on the up, after years of stagnation – a very welcome development.