AIG Income Protection
AIG Income Protection
A key aim of AIG Life’s new IP product is to offer best in class product features and to offer early adoption services to help customers recover faster and get back to work quicker. That differentiates it from most IP policies, where the focus is often on financial benefits and cost.
The new plan is available as part of AIG Life’s menu plan, which also includes life cover and critical illness cover. The new IP plan’s main benefits include:
- Rehabilitation support. This built-in benefit pays up to three times the monthly insured benefit and reimburses costs such as physiotherapy, counselling and help travelling to work. The services need to be agreed by AIG Life
- A two year limited payment term option.
- A guaranteed benefit of £1,500 a month so that customers don’t have to prove their income up to this amount when they claim.
- Family carer benefit. This pays £1,500pm after three months.
- Trauma benefit. This pays the lower of six times the monthly benefit or £50K on diagnosis of blindness; deafness; loss of hands/feet; loss of independence; loss of speech, or paralysis of limbs.
- Hospitalisation benefit. This pays £100 a night after six nights in hospital and pays up to 90 nights’ payment a year.
- Terminal illness (advance payment) benefit. This pays 12 times the monthly benefit on death.
- Death benefit. This pays a lump sum of £10,000 on death.
- Guaranteed insurability options. This is an option to increase the insured benefit by up to 50% on marriage; having a child; promotion at work, or an increase in the customer’s mortgage.
- Waiver of premium benefit is built in.
The plan is available for customers aged 17-54. The maximum end age is 70 and deferred periods of 4, 8, 13, 26 and 52 weeks are available. AIG Life uses three disability definitions – own or suited occupation and work tasks (daily activities).
The maximum annual benefit is £250,000 a year, which applies for customers earning £530,000pa or more. The maximum benefit is 60% of the first £30K of income, 55% of the next tranche to £100K, and 45% of any excess above that.
As with most of AIG Life’s products, Income Protection also includes Best Doctors, Winston’s Wish and the Funeral Pledge.
Comment: The benefits of rehabilitation have long been recognised, but most insurers have tended to view it as a way to help keep claims costs low rather than as a customer benefit per se. At least, that’s how it looks, and so customers have tended not to see it as a benefit on products such as IP.
AIG Life has taken a different view and spelt it out upfront. So, customers should help see AIG’s IP plan as not just ‘insurance’ but also as the kind of ‘help insurance’ that does actually put their interests first. It’s not all good though as the T&Cs (terms and conditions) don’t mention the benefit (which doesn’t really have a name in the literature we’ve viewed). In effect, therefore, it’s an ex gratia benefit, as AIG Life still has to approve of the help to be given.
So, should we discount it then? No – both this benefit and the other help insurance benefits such as Best Doctors, would be easy to include in the T&Cs of yearly renewable general insurance policies but, if you have a long-term contract that might last 30 years, what could you actually say in your T&Cs? The key here – and it’s quite a tricky argument wearing one’s’ consumerist’ hat – is AIG Life’s claims reputation. Quite simply, if it delivers on these promises, advisers and customers will be happy. If it doesn’t – well, there’s always the FOS and supporters will vote with their feet.
So, I’m happy about such services being promoted but not being absolutely guaranteed because maybe this is the best way to do things and it’s better to have them than not. Even so, other non T&C options such as having third-party claims overseeing panels or individuals might be something for all protection insurers to consider in future.
Meantime, we like what AIG has done. Yes, some competitors will offer more options, but the proposition is straightforward, more customer-focused than most, and helps make IP not just a ‘good thing’ but also a desirable thing.
Plus points: A focus on rehab benefits as well as on the traditional benefits of IP cover; Also includes services such as Best Doctors; Good IP benefits that are straightforward to understand without too many unnecessary options.
Not so plus points: Some competitors offer more options; Just one (two year) short-term benefit period option; Rehab is at AIG Life’s discretion and benefits such as Best Doctors are not guaranteed in the T&Cs.
Website: http://www.aiglife.co.uk.
Rating (max 10): Innovation: 9. Overall: 8. Gold
Tags: IP; AIG Life