Exeter Family Friendly Income One
Exeter Family Friendly has taken the product formerly known as the Professional Income Protection Plan and now renamed it Income One. In the process, it has introduced a number of key changes. These include:
• There is no longer a premium rating for being female. Traditionally, on long term income protection plans, (although this has not been a feature of most short term annually renewable ASU type plans) females pay 50% or more than males of the same age. However, following the recent ECJ Test-Achats ruling (see e-PR 132, April 2011), that will be outlawed from 21 December 2012. Exeter has brought its response forward and this also brings
• the plan into line with most PMI and ASU products so far as gender is concerned.
• Customers can now insure 65% of their income up to £60,000 a year. Previously the limit was 50%. Maximum benefit is cut from 65% to 45% of all income in excess of £60,000 a year.
• The list of acceptable occupations has been reviewed and increased. However, the plan continues to target lower risk occupations only.
• Customers can now ‘fix’ a proportion of their benefits. This new feature means that the fixed element of the income protection benefit is no longer subject to financial proof and testing when a claim is made. Up to 50% of income can be fixed. For example, someone earning £50,000 a year could have a maximum annual insured benefit of £32,500, of which £25,000 is fixed, regardless of their income, provided that the customer is still actively employed when the claim is made. Additional evidence of income may be required as soon as the policy starts in order to fix the income.
The plan offers waiting periods of back to day one (after three days off work), 1, 4, 8, 13, 26 and 52 weeks. There are no standard exclusions but personal exclusions may be applied when the plan is underwritten.
Premiums are not level, but instead rise every year, although the actual premium rates are guaranteed. Smokers pay 35% higher premiums than non-smokers.
Premium rates depend on starting age and finishing age as well as deferred period and smoking status. Applicants below age 55 can complete a full application form or instead a shorter form with a follow-up tele-interview. Age at entry must be between 16 and 59.
Comment: The big new idea here is being able to fix an element of the insured benefit (or in some cases the whole benefit); Exeter has gone further though by being one of the first to offer unisex rates and by making other improvements to the plan too; It adds up to a very strong package, although some of the ideas will quickly be followed by others.
Plus points: Ability to fix income; unisex rates; max 65% benefit, and other improvements.
Not so plus points: Some smallprint on the ability to fix and unisex rates mean males pay (relatively) more relative to the actual risk. Premiums go up each year. Low risk occs only.
Website: http://www.exeterfamily.co.uk.
Rating (max 10): Innovation: 9.5. Overall: 8.5. Gold.