Aviva has simplified the benefit formula under its Income Protection+ policy. The new formula also means most customers can have more cover than before too.
Customers can now insure up to 65% of the first £60K of their gross earnings, plus 45% of their gross earnings above £60K. The previous maximum was 65% of the first £10k, plus 55% of income between £10K and £90k, plus 45% of any income above that. The maximum benefit under the policy remains at £20K a month (£240K a year).
Aviva points out that the new limits mean advisers also have an opportunity to review the level of cover existing clients have, as many will be able to have a higher insured benefit now.
To go with the changes, Aviva has updated its income protection maximum benefit calculator and its maximum benefit dual deferred calculator to help advisers.
One downside is that the old Family Carer Benefit has now been withdrawn. Aviva said it had had a ‘very low number of claims’ under this benefit heading but pointed out that it offers a range of benefits in its Support Plus package. These benefits include:
• Special arrangements for NHS doctors, surgeons, nurses and midwives.
• Back to work benefit and support.
• Waiver of premium benefit.
• Hospital benefit.
• Trauma benefit.
• Benefit guarantee.
Aviva paid out £38.1m in 2018 on claims to 4,049 customers under its Income Protection+ plan, which was launched in 2016. The average claim under the plan has lasted five years and 19 months, Aviva says.
Comment: This is a very simple update – just a two rather than three tier calculation to work out maximum cover.
But that small change also means many customers can now have more cover, while existing customers may want to top up to the new higher level too. So, quite a small update, but a welcome one and more simplicity is always good too!
Plus points: Two rather than three tier benefit calculator; Higher benefit max for many customers; Existing customers may want to top-up their cover too.
Not so plus points: The old Family Carer benefit has been discontinued on new plans; Maximum overall benefit is unchanged.
Rating (max 10): Overall: 8. Gold
Tags: IP; Aviva
I Mark: No