British Friendly Care Assistance Benefit and Death Benefit

October 2016 British Friendly Society: IP


Income protection provider British Friendly has updated its existing plans by adding a Care Assistance Benefit at no extra cost to customers. The benefit is discretionary (which means it could be cut or changed at any time) and pays a flat £125 a week benefit if the customer’s partner or child (below age 18) needs care for 35 or more hours a week for a continuous period of four weeks or more. Once agreed, the claim is backdated to day one and then pays out for a maximum of 26 weeks over the life of the policy.

Making a claim is simple and there is no requirement for State benefits to be paid or to pass an ADL (activities of daily living) type test, nor does the customer have to stop working. British Friendly just requires confirmation from a medical professional that full-time care is needed, although pre-existing conditions are excluded.

Earlier British Friendly launched a new Death Benefit, which pays six months’ income protection benefit as a lump sum if the customer dies during the policy term. The minimum payout is £1,000. The benefit is not paid on suicide within 12 months of taking out a policy. Members can nominate individuals to receive the benefit, with the nomination form available online or through the post. If no nomination is made, the benefit is paid into the deceased member’s estate. This benefit is also provided at no extra cost.

Comment: British Friendly is to be congratulated at introducing two new benefits, both of which are provided at no extra cost and apply to existing as well as to new customers.

Whilst both are relatively small, both are actually useful. For many families, care is most likely to be needed for older parents and that can be planned for (at least to some extent). But having to care for a partner or child is often unexpected and any financial help can be invaluable. In total the benefit could pay out up to £3,250, so the overall effect can be significant to a hard-pressed family budget.

The death benefit is also relatively small but again could make a difference and the online nomination form can ensure the benefit is paid out quickly and to the person the client wants to benefit.

One criticism is that both benefits are discretionary, meaning that they could be withdrawn or modified at any time. However, this is more of a theoretical disadvantage, as the alternative might have been simply not to offer the benefit at all. For smaller mutuals especially, discretionary benefits can make sense, although customers generally prefer their benefits guaranteed. That said, given that both benefits have been introduced at no extra cost to the customer, it’s a bit churlish to criticise a benefit that is on top of all the other features and benefits of the plan.

Plus points: Both benefits are provided at no extra cost to new and existing policies; Although relatively small, both benefits could be of real help to many families; The changes are indicative of a more vibrant IP market as providers vie to offer something different to differentiate themselves from other providers.

Not so plus points: The two benefits are discretionary rather than contractual, so could be discontinued or changed at any time; Benefit can only be claimed if caring for a partner or child and age limits apply; Both benefits are relatively small.


Rating (max 10): Innovation:  9. Overall: 8. Gold

Tags: IP; British Friendly

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