The Exeter has launched Income First, a new income protection product combining its existing Income One and Pure Protection products. Income First has been designed to simplify the income protection journey for advisers and customers, offering cover across a wide range of occupations from office-based professionals through to manual workers and skilled trades.
In response to feedback from advisers, there is now a level guaranteed premium option across all occupation classes, although age-costed options are still available too. The need for medical evidence at the underwriting stage has been reduced with improved non-medical limits. Now, medical evidence as standard is only required for applicants over 42 years old, while the threshold for financial evidence has been increased.
There is a new employer change promise, designed for members who may change employment during the term of their policy and find that their sick pay is restricted, something which is often the case especially during probation periods. With the employer change promise, eligible customers who need to make a claim may receive their benefit before their waiting period finishes.
NHS medical professionals and teachers can now choose flexible waiting periods, while more options for customers to increase cover in specific circumstances have been introduced, such as for those in rental accommodation.
Looking at the new plan in more detail, three premium options are now available:
Level guaranteed premiums that stay the same for the life of the policy. Available where the chosen waiting period is four weeks or longer.
Age-costed guaranteed premiums that increase with age but the rates that determine the premiums do not change.
Age-costed reviewable premiums that increase with age but are reviewed after three years.
Cover is available from £500-£10,000 a month. If the customer earns less than £100,000 a year, they can claim up to 60% of their personal taxable income. If they earn over £100,000 per year, they can claim up to 60% of their taxable income up to £100,000 and 40% thereafter.
The disability definition is any illness or injury that prevents the customer from doing their specific job – not any job, regardless of what they do for a living - and how long the claim lasts.
Customers can increase their benefit if their circumstances change including, but not limited to, getting married, having a baby, taking out or increasing a mortgage on the property they live in, or if their rent increases. Benefits can be increased by a maximum of 50% or £833.33 per month, whichever is lower.
Waiver of premium is automatically included. Fixable benefits are available in two ways. First, customers can fix up to 75% of their initial benefit by providing financial evidence upfront. Or, they can fix up to £1,000 a month by providing simplified financial evidence at point of claim.
If, following a claim, a customer returns to their own occupation part-time, their policy will pay a reduced amount (proportionate to their reduced salary) for a maximum of 24 months or until they reach the end of their claim period. Or, if they choose another lower paid occupation, a proportionate reduced amount is payable until they reach the end of their claim period or they return to their previous occupation or their previous level of income.
Comment: The Exeter has taken a thorough look at its IP proposition, replacing two existing plans with its new Income First product.
It’s useful to have now three premium payment options and improved underwriting limits will help sales too. Complex areas such as NHS workers can better be accommodated and the new employer change promise meets a need that few think about in advance but at what is always a pretty scary time when switching jobs.
Overall, this is a comprehensive update that makes sense, offers good options and simplifies too.
Plus points: Replaces two previous IP plans; Three premium payment options now; Two flexible benefits options; Useful employer change promise; Improved underwriting limits.
Not so plus points: Three different premium payment options may seem a bit much for some; IP is still perceived as being too complex by some advisers.
Rating (max 10): Overall: 8.5. Gold
Tags: IP; The Exeter
I Mark: No
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