Holloway My Sick Pay (Protection Review: Gold, Adviser score: 9.3)
Holloway Friendly has launched My Sick Pay to replace its existing Purely, Short Term Income Protection and one2protect income protection plans.
The mutual says it developed My Sick Pay to simplify its proposition from multiple products into one, making it easier for advisers to understand and advise on. It added that advisers wanted consistent options across all job types to help them set up the right cover at the right price. That meant closing some significant gaps in the plans.
My Sick Pay offers a choice of level or age-based prices, short or long term pay-outs, and guaranteed or reviewable prices across all jobs. The new product is also a move to individual pricing based on more rating factors, including the customer’s job and whether they smoke, Holloway says.
As well as redesigning its IP proposition, Holloway has rewritten its literature to ensure it’s free of jargon and is easy to understand. Things like defined terms have been replaced with friendly, direct and everyday language. Some 90% of applications are underwritten within seven working hours too the mutual said.
Technically, the new plan has a simple maximum benefit of 65% of pre-tax earnings before tax, up to
£65,000 of Sick Pay a year. Deferred periods of one week to a year are available and maximum benefit period is either one year, two years or to a pre-selected retirement age (between 50 and 70). Benefits can be inflation linked to the RPI (Retail Prices Index) and maximum age at entry is 59.
A guaranteed insurability feature (Life Changes Guarantee) covers a range of life changes from marriage to having a child and from having a new mortgage or moving to a higher rent property to the customer’s income rising by more than 20%. Usefully, the literature also sets out the underwriting and price implications if the customer wants to change their cover in any way in future.
After three years, customers can pause their cover and monthly payments for up to six months in any 12 month period. On diagnosis of a terminal illness, six months’ benefits are paid. At the insurer’s discretion, payments may be made to help to pay for the cost of an operation or
medical treatment if the customer is too unwell to work and their doctor thinks it will help them recover more quickly. A range of added value benefits is included in the cover too.
Comment: Holloway is currently an IP specialist only, so it’s a bold move to go from three IP plans to just one. However, the new plan has a lot going for it, not least is well-written literature that explains in very straightforward terms exactly what the plan does and does not do.
The plan incorporates some of the best features of the old plans but makes life more straightforward for advisers and opens up Holloway to being considered for a wider range of risks.
The new plan won’t suit everyone but it offers enough choice to ensure Holloway should be on the shortlist for many more advisers going forward, all with the unique heritage that only the very first income protection plan provider can offer.
Plus points: Three plans merged into one; Well thought out cover improvements; Simple to understand but still with a good range of options; Guaranteed benefit; Choice of level or age-related premiums; Discretionary benefit that could fund hospital treatment in some cases; Well written literature.
Not so plus points: A niche player (but that’s also a benefit); Less maximum cover than offered by bigger providers.
Website: http://www.holloway.co.uk.
Rating (max 10): Overall: 8.5. Gold
Tags: IP; Holloway Friendly
I Mark: No