LV= Income Protection
LV= has introduced a raft of changes to its existing Critical Illness Cover and Income Protection plans. The CI plan can now run to age 70 (or 40 years if less) and more CI conditions are now included.
The main changes to the IP plan are:
• Minimum benefit £1,000 a month (e.g. if income fluctuates and is low at the point of claim).
• Cover available up to age 70 for 94% of occupations covered (reflecting higher State retirement ages).
• One and two month deferred periods now available for all occupations.
• Removal of the ‘suited’ definition and an increase in the number of ‘own occupation’ definitions (1,170 occupations are now covered under this, with 326 having instead a ‘task’ based definition).
• Maximum benefit now 55% of income or net profit (previously 50%).
• For self-employed customers, pre-claim earnings are now averaged over three years rather than one year.
• Rehabilitation benefit now ceases at the plan’s cease date rather than at age 60.
Plus points: A range of improvements on cover length, maximum benefit, and income and disability definitions. Nearly 80% of occupations are now ‘own occupation’.
Not so plus points: Some restrictions remain, adding to the complexity of the plan (especially for intermediaries). All of the changes are relatively minor—IP continues to perform below par so a more innovative approach may be needed to change that. In some areas this plan offers less than the BFS plan we reviewed in the same issue—although much can depend on the actual decisions taken by respective underwriters so such comparisons may not be quite so easy to make in practice.
Website: http://www.lv.com/adviser.
Rating (max 10): Innovation: 7. Overall: 7.5. Silver.