Friends Life Income Protection
Friends Life has updated the income protection element of its Protect+ plan through introducing the following:
The guaranteed benefit has increased from £1,300 to £1,500 a month. This is paid without income checks when a claim is agreed.
For customers where the insured benefit exceeds £1,500 a month, provided their earnings fall by less than 10%, the full benefit will now be paid for the full duration of their claim. Previously this was only guaranteed for 12 months.
If the customer’s earnings rise by more than 20% as a result of career progression, they can now take a one-off increase in their annual benefit, up to a maximum of £20,000 a year, without the need for new underwriting.
The existing therapy benefit is now contractual and pays up to £200 per policy year (and 100% of the cost) for physiotherapy, osteopathy and chiropractic.
Comment: Not a huge raft of changes, but each one has appeal. Guaranteed benefits help avoid the criticism that IP insurers can effectively underwrite customers not just at outset but also if they claim. Increasing that limit to £18,000 a year roughly means that people on or below average earnings are protected from income falls. If they are on a higher annual income, as long as their income falls by less than 10% they’re best protected too. Given that all protection insurance is designed to provide peace of mind, such changes can make a very positive impact on customers’ confidence and their propensity to buy. They also help raise trust in insurers.
The other changes will be welcomed too. We haven’t detailed the product’s other benefits (go to the website – it’s a pretty comprehensive package) but these changes should further increase the appeal of the new Aviva subsidiary’s IP plan.
Plus points: Improved guaranteed benefits and benefits for those whose income falls by less than 10%; One off increase now available underwriting free if a customer gets a career progression rise; Therapy benefit increased; Adds to an already strong package; Friends is now part of the giant Aviva group.
Not so plus points: Only a few changes; Friends is now part of the giant Aviva group.
Website: http://www.advisers.friendslife.co.uk/products/individual-protection/.
Rating (max 10): Innovation: 8. Overall: 8. Gold
Tags: IP; Friends Life