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Income Protection from LV=


Pros

Cons
New 12 month payment option.The need for income may go on well past 12 months.
Cheaper premiums and lighter underwriting.Not easy to switch to a longer payment term later.
A better alternative to ‘toxic’ PPI.IP is still more complex to buy that PPI was.

The Product

LV= has added a 12-month claim period option to its existing Budget Income Protection product.

Offering cheaper premiums than plans with longer maximum benefit periods, the new option still offers as standard all existing LV= benefits such as parent and child cover and Doctor Services. LV= says the plan is aimed at budget conscious clients looking to protect their most valuable asset – their income.

As with other benefit terms, the new 12-month option can be claimed on a number of times during the life of the plan, and has no standard exclusions.

The option is available to clients who select guaranteed premiums and can also be combined with other protection plans such as critical illness cover for an all-inclusive safety net.

What they say

Protection director Debbie Kennedy said: “The new 12-month option marks a further step in our longer term strategy to help clients protect their most valuable asset – their income. We’re making valuable protection more accessible and flexing cover and benefits to fit the evolving world of work and needs of clients. Advisers told us that their clients are looking for more affordable income protection and our new 12-month option meets that need as well as offering our value-added features and member benefits from day one.”

What we say

The demise of PPI has left a huge gap in the protection market that long term IP has been slow to try to fill. This new option from LV= offers a realistic alternative and should also appeal to those who want the benefits of traditional IP cover but need lower premiums or do not want a long benefit period for any reason.

Long term, short benefit period IP (is there a better generic term for such products?) has many advantages over PPI (permanent cover; no IPT on premiums; higher maximum benefit, among others) and still includes full access to a range of important and valuable help solutions if they are ever needed.

It’s a small change but an important one.