Royal London has introduced a number of changes to its Income Protection proposition, which the insurer says are designed to ensure the proposition continues to meet clients’ changing needs. All are included as standard.
The new benefits added to the menu product are:
* Fracture cover: up to £4,000 per claim with a maximum of two claims accepted in each 12 month period. Multiple fractures are covered up to the £4,000 claim limit.
* Hospitalisation payment: £100 a night if more than six consecutive nights are spent in hospital during the deferred period including connected claims, up to a maximum of 90 nights during the term.
* Additional payment on death: A payment equivalent to 12 months premiums will be made if death occurs during the policy term.
* Accelerated claim on terminal illness: The deferred period is waived and the monthly benefit paid if the customer is diagnosed with a terminal illness with less than 12 months life expectancy.
* Back to work payment: A percentage of the monthly benefit is paid in the first two months after a customer returns to work following a claim if they have a 13, 26 or 52 week deferred period. For example, if the cover payment period is one or two years, the customer will receive 25% of the monthly payment in month one and 10% in the second month.
The maximum benefit has been increased to 65% of the first £15,000 of income, plus 55% of the remaining earnings before tax, up to a maximum of £250,000. In addition, changes have been made to what can be taken into account when calculating allowable cover. For employees these include:
* Regular dividend payments that can be evidenced.
* A spouse’s nominal income up to £11,500.
For the self-employed:
* Certain fixed overheads such as rent for premises.
What They Say
Reinsurance manager Toby Bainbridge said: "According to our State of the Protection Nation report, just 4% of adults owned an income protection policy, compared to 6% with critical illness cover and 26% with life insurance. The inclusion of fixed overheads for the self-employed is an industry first. The enhancements we have now included as standard such as fracture cover are designed to help customers when they most need financial support and the changes to the maximum cover are designed to better cater to their needs and protect more of their income.
"Eligible protection customers can access Helping Hand at no extra cost. This comprehensive support service, combined with the new back-to-work payment provides financial, emotional and career support to help get people back on the road to recovery. These additions make our income protection one of the most comprehensive products currently available in the market."
What We Say
"The trend on IP cover is to extend beyond a simple monthly or weekly payout and also to stretch what financial cover can be given too. We welcome both developments and Royal London’s latest changes fit that template too.
"The only downside to these new or improved benefits and terms (assuming they don’t result in significant price increases) is that the proposition becomes a bit more complex. That should not be an issue though – and it’s much better to have a financial benefit if you break your leg than to have no benefit but a slightly simpler product!
"IP generally needs to become sexier to appeal to more people, and these changes should help."