Holloway Friendly Purely IP
Hollow Friendly (the UK’s first Holloway society) has launched its Purely IP product as a simple long term income protection (IP) plan, with no investment element (unlike its Holloway style plans, which build up a cash value available at retirement).
The plan is available to UK residents aged 18-54 at outset and has a minimum term of ten years. Selected retirement age can be between ages 50 and 65. Key features of the plan include:
• Maximum benefit is the lower of £26,000 a year or 50% of income.
• Deferred periods of 4, 8, 13, 26 or 52 weeks.
• An own occupation disability definition is used for the first 104 weeks of claim. After that it changes to an own or reasonably suited definition.
• Escalation is linked to RPI (Retail Prices Index) to a maximum of 10% a year.
• Premiums are guaranteed but increase on 1 January each year in line with age. Premium rates do not change with occupation, gender or for smoking.
• Career break and terminal illness benefits (six months benefit, which must be claimed within one month of diagnosis. On payment of this benefit the plan terminates). Medical expenses benefit (this is a lump sum, paid at the company’s discretion, that can be used towards the costs of a specified medical operation or treatment where that might lead to a shorter claim period).
• Exclusions are fairly standard.
• Commission is 140% initial for online applications (125% for paper) with 3% renewal commission and a commission clawback period of 36 months.
Plus points: Simple low start pure protection cover. No ratings for gender, occupation or smoking.
Not so plus points: Premiums are not level, but increase each January. Relatively low maximum benefits; A claimant who claims the terminal illness benefit could be worse off if they do not die within six months—this looks to be asking them to play Russian roulette with their benefits…
Website: http://www.holloway.co.uk.
Rating (max 10): Innovation: 7. Overall: 7.5. Silver.