Friends Life Income Protection
Friends Life has made some changes to its established income protection plan, focusing around maximum insured benefits. The changes are:
The maximum insured benefit is now 65% of the customer’s first £10,000 of income, and 55% of anything above that. Previously the limits were 70% of the first £10,000 and 50% of the next £50,000 and 40% of the balance. The changes therefore reduce from three to two the number of income tiers to take into consideration.
P11D benefits – which includes the value of company cars, benefits such as private medical insurance and accommodation – can now be counted as gross income. This can enable the maximum insured benefit to be even higher, especially for those who have a large non-salary benefits package.
The changes are also more portal friendly, as advisers no longer need to contact Friends Life directly for some quotes.
Comment: This time around, Friends Life’s IP changes are relatively minor, but no less welcome for that. They focus around maximum benefits and Friends Life has both simplified the calculation and (in most cases) increased the maximum insured benefit. In some cases though, those on low incomes may now have a smaller maximum benefit.
The changes are part of a general trend to making IP not just more attractive for customers but also taking away some of the headaches that advisers often had when trying to place business (or even understand what exactly was insurable). That is a very admirable trend, and we are sure that the process is not over yet, so keep an eye on how all IP insurers are adapting their plans to make them more attractive.
Plus points: More cover now possible for most people; Simpler two rather than three stages to calculate maximum cover; P11D benefits now insurable; More portal friendly.
Not so plus points: P11D benefits can vary each year, which could affect maximum cover levels; Relatively minor changes only this time; Some lower paid workers now have a lower maximum benefit.
Website: http://www.friendslifegroup.com.
Rating (max 10): Innovation: 7. Overall: 8. Gold