Cirencester Friendly My Earnings Insurance
My Earnings Insurance is Cirencester’s first non-Holloway income protection plan and is being marketed through insurance brokers and mortgage brokers as well as through financial advisers. The plan’s main features include:
A choice of level premiums throughout or annually escalating premiums which go up on each birthday.
A choice of level or indexed benefits. The latter rise in line with average earnings, up to 10% a year.
An own occupation definition applies, with a level benefit throughout the claim period.
Choice of day one or 4, 8, 12, 26 or 52 weeks deferred periods.
Optional Severe Injury Cover, which combines day one cover for a series of injuries with a longer deferred period for illnesses. Cirencester says this is unique.
Terminal illness benefit. This pays a lump sum on diagnosis (where death is expected within 12 months) on top of continuing income benefits until death.
Option to have split deferred periods.
The maximum benefit is 65% of earnings up to a maximum benefit of £42,640.
The minimum age at outset is 18 and the maximum age is 54.
The plan is not available to those on zero hours employment contracts or to anyone who works outside the UK for more than eight weeks a year.
The plan can last to age 70 or a given retirement age (determined by the Society) based on the customer’s occupation.
If an exclusion is applied for back disorders or mental illness, a 5% base premium discount is applied to each.
The plan is available through the Assureweb comparison portal or direct.
Comment: Cirencester is known for its Holloway style IP plans and this is its first pure protection IP plan, so advisers now have a choice of which type of plan to recommend. The plan is straightforward with some nice features, although some of the policy rules come across as being rather quirky.
Both the Severe Injury Cover and Terminal Illness benefits provide useful additional cover and we especially like the fact that the plan’s indexation is based on average earnings rather than prices. Although, short term, prices are rising faster, longer term, the reverse is likely to apply and, in any event, income protection should arguably be more about income than the cost of things.
We also like the fact that Cirencester offers own occ for all occupations accepted and a good choice of deferred periods, but do watch out for the society-defined retirement ages.
Plus points: Offers a pure protection alternative to Cirencester’s traditional Holloway plans; Includes Severe Injury and Terminal Illness benefits; Premiums can be level or increasing; Indexation linked to average earnings rather than the less appropriate (but more common) prices.
Not so plus points: The plan is unsuitable for those on a zero hours contract; To claim, customers must have been in their current employment contract for at least four weeks; Less suitable for very high earners; There are some rather old fashioned sounding rules.
Website: http://www.cirencester-friendly.co.uk co.uk.
Rating (max 10): Innovation: 7. Overall: 8. Gold
Tags: IP; Cirencester Friendly