The Exeter has revised its income protection (IP) offering around its existing Pure Protection and Income One plans. This review focuses on the Income One Plus product, which is aimed at those in professional, low risk and administrative occupations.
The main changes include:
* A simplified benefit option allows the customer to fix benefit at 75% of the initial benefit. This is subject to providing financial evidence within 12 months of the policy starting and in effect avoids having to prove income on this element of the plan when a claim is made.
* Or, a benefit of up to £1,000 a month can be fixed at outset, by providing simplified financial evidence when a claim is made.
* State benefits are no longer taken into account in any benefit assessment.
* Minimum benefit guarantee is now available for two year limited claim period plans.
* Maximum benefit is now 60% of gross income up to £100K and 40% thereafter.
* Waiver of premium benefit has been improved in that the waiting period is now the same as for the insured plan benefit.
* Claims can be paid up to a chosen finishing age (any year between 50 and 70) or for a maximum of two or five years.
* Rates can be level guaranteed or reviewable or age costed (i.e. the premium goes up each year) with guaranteed or reviewable premiums.
* Waiting (deferred) periods can be from day one and one week (guaranteed level premium plans) up to one year. Day one cover means that someone off work for as little as three consecutive days (excluding Sundays) can claim.
The plan is available to those between 18 and 59 when they apply and they must have been UK resident for at least three years. Indexed benefits are linked to the Retail Prices Index (RPI) and limited to 10% pa. Minimum plan benefit is £500pm and maximum is £10,000pm. Other benefits are fairly standard for IP products. There are no fixed exclusions, but exclusions may be added at underwriting stage. Limited benefits are available to housepersons and those who are unemployed when claiming. After four years, customers can have a short-term break of up to 52 weeks e.g. if on a work break. Longer term breaks – up to three years – are also available in some circumstances.
Changes to the Pure Protection Plus plan are broadly similar (albeit with some differences). This plan is aimed at those in virtually any occupation but may appeal most to those in blue collar and class 4 occupations. All plans have an own occupation disability definition and additional benefits on all plans include Exeter Assist, GP Helpline and private prescription services.
What They Say
CEO Andy Chapman said: “At The Exeter, we have always championed income protection and have been at the cutting edge of product design. This launch is the next important step in maintaining this reputation.
"All needs and budgets are different which is reflected in the flexible approach to design we have taken with these new products. Advisers will be able to match the plan perfectly to each client, with no compromise.
"Our new fixed benefit options simplify and streamline the claims process and will provide advisers and their clients even more confidence that when they choose income protection with The Exeter, they choose an insurer that delivers when it matters most.”
What We Say
"After well over a hundred years, you might think there’s not much an existing provider can do to its income protection offerings. Not so. The Exeter’s new plans (really a development of existing ones) are more than just tinkering or updating.
"What the provider has done is both to offer more flexibility to meet specific needs and made the plans easier to buy and more desirable to buy too, all while still keeping things simple.
"So, you can choose how best to set the plan up and then when or if a claim is made, be confident the claim will be paid with minimal risk of issues arising around income. The Exeter Assist and other additional benefits also mean help won’t just be financial and, as 7 Families has shown, that is just as important in the real world.
"By having what might be thought of as blue collar and white collar products (not sure anyone still uses those terms, but you know what I mean), the best package of benefits for any individual client is easy to choose too (if they qualify for Income One Plus, go for that).
"Yes, the new plans are not a panacea and price and underwriting both still affect what will be the best provider choice (especially now that many insurers don’t have standard exclusions but add them if necessary at underwriting stage). But the basic packages look to be a good basis on which to build the case for more people to buy IP – a product that still sells in too low numbers compared to the need and to what it offers."