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‘Income Protection Plan’ by VitalityLife


Useful upgrades that should widen the plan’s appeal.More options means more complexity
Public sector workers can now get benefits better matched to their employer’s sick pay scheme.Automatic income validation has some limits.
Guaranteed benefits and improvements to income verification rules.Hospitalisation benefit only kicks in after six days hospitalisation.

The Product

VitalityLife has updated its existing Income Protection (IP) plan, making a number of changes. Key changes are:

* On public sector plans, bespoke deferred periods are now available for a wider range of public sector employees, including all NHS doctors, surgeons and nurses; public sector teachers, and council workers. For those affected, it means they can have a benefit much better aligned to their employer sick pay scheme.

* The Earnings Guarantee has been improved. So, if a customer’s earnings when they claim are less than their Earnings Guarantee established at the start of the policy, the higher level of benefit is paid.

* Customers now have up to six months from the start of their plan to validate their monthly insured benefit if it is between £1,500 and £8,000 a month.

* Vitality now automatically validates monthly insured benefits of less than £1,500 per month. That means customers who have benefits less than this do not need to validate their income at the start of the policy.

* New Hospitalisation Benefit. Customers with Comprehensive Income Protection plans now get £100 a day for up to 90 days in total, if they are hospitalised for more than six days during their plan’s deferred period.

* Changes to short term IP Plans. Customers can make multiple claims for the same cause of absence, as long as they return to work for more than six months in between claims. Customers with Primary, Comprehensive and Short Term Income Protection plans are now able to insure up to 60% of their income up to £5,000 a month and 50% thereafter.

What They Say

Director of legal and business support, Sally Burrowes, said: “Many people still don’t have cover in place for potentially one of the most important things in their life - their income. "This suite of enhancements will increase the appeal of our income protection plans by meeting the needs of more customers. And, combined with our Vitality Healthy Living Programme, members can enjoy the peace of mind of Defaqto 5-star rated cover while accessing incentives and rewards, even if they never need to claim on their policy.”

What We Say

"Over the past couple of years, not least due to the lasting effects of the Seven Families campaign, long term income protection has been on the up.

"It is good therefore to see Vitality updating and widening the appeal of its IP plan. The changes are all relatively minor but they open up the plan to more people (public sector workers in particular) while a lot of effort has gone in too to making proving income either unnecessary or simpler.

"One of the bugbears of IP has always been its dual underwriting nature – you’re fully underwritten upfront and then financially underwritten again if you claim. It makes it look like insurers are looking for reasons to reject claims, when they should be looking for reasons to pay them. Vitality’s changes should help nail that myth – at least for many."