The Exeter Pure Protection Plus and Income One Plus
The Exeter has revised its income protection offering for individuals and updated its existing Pure Protection and Income One plans, adding a ‘Plus’ suffix to differentiate them. The Income One Plus product is aimed at those in professional, low risk and administrative occupations and offers:
A simplified benefit option, allowing the customer to fix benefit at 75% of their initial benefit. They must provide financial evidence within 12 months of the policy starting but can avoid having to prove income on this element of the plan when a claim is made. Allowing this to be provided post-sale can also save the adviser time upfront too.
Or, a benefit of up to £1,000 a month can be fixed at outset by providing simplified financial evidence when a claim is made.
State benefits are no longer taken into account in any benefit assessment.
The minimum benefit guarantee is now available for two year limited claim periods.
The maximum benefit is now 60% of gross income up to £100K and 40% thereafter.
Waiver of premium benefit has been improved. The waiting period is now the same as for the insured plan benefit.
Claims can be paid up to a chosen finishing age (which can be any age between 50 and 70) or for a maximum of two or five years.
Rates can be level guaranteed or reviewable or age costed (i.e. the premium goes up each year) with guaranteed or reviewable premiums.
Waiting (deferred) periods can be from day one and one week (guaranteed level premium plans) or up to one year. Day one cover means that someone off work for as little as three consecutive days (excluding Sundays) can claim.
The plan is available to people between the ages of 18 and 59 when they apply and they must have been UK resident for at least three years. Indexed benefits are linked to the Retail Prices Index (RPI), limited to a maximum 10%pa. The minimum plan benefit is £500pm and maximum is £10,000pm. Other benefits are fairly standard for IP products and there are no fixed exclusions, although exclusions could be added at underwriting stage. Limited benefits are available to housepersons and those who are unemployed when claiming. After four years, customers can have a short-term break of up to 52 weeks e.g. if on a work break. Longer term breaks – up to three years – are also available in some circumstances.
Changes to the Pure Protection Plus plan are broadly similar (albeit with some differences). This plan is aimed at those in virtually any occupation but mainly will sell to those in blue collar and class 4 occupations. Both plans have an own occupation disability definition and additional benefits on all plans include Exeter Assist, GP Helpline and private prescription services.
Comment: The Exeter has looked carefully at its existing individual IP plans and introduced raft of sensible but valuable enhancements. In the process the products now have a ‘Plus’ suffix – although both names could be accused of not being very self-explanatory.
The changes offer both more flexibility to meet individual customer needs and also make the plans easier and more desirable to buy.
A good example is the ability to fix part of the benefit. One of the downsides of IP is that the customer is effectively financially underwritten only when a claim is made and, if their income has fallen, that can result in a lower payout. The Exeter’s solution is not perfect (some competitors will offer a higher guarantee in some circumstances) but it’s simple, understandable and reasonable.
The 7 Families initiative illustrated just how valuable non-financial benefits are in the real world and Exeter Assist and other additional benefits are there to provide help and support. Such benefits tend to be undervalued in the buying process (not least, how do you value them?) but are so important in helping people not just get back to work but also to get back to life if illness or disability hits them.
The starting point in choosing cover is whether a customer is in a blue collar or white collar job. If the latter, choose Income One Plus. A wide range of deferred periods – which could see benefit paid after just three days off work in some cases – is available and The Exeter looks to have trodden a careful line between offering enough flexibility and risking over-complicating the proposition.
The end result is two tweaked products that will not be perfect for everyone (and price and underwriting are still key in choosing between insurers) but the package has a lot to appeal to the millions of people who don’t have IP cover but really should do.
Plus points: Improved benefits take the plans into ‘Plus’ versions; God choice of options that is not too overwhelming; Starting point is simply to determine whether your client qualifies for the Income One Plus version; Simple to understand fixed benefit option minimises the risk of not being able to claim due to lower income in future; Own occupation definition and no standard exclusions.
Not so plus points: Very short waiting periods can add considerably to the cost; Fixing 75% of the benefit still leaves a potential 25% gap and some competitors offer a more generous limit (albeit with qualifications); Some occupations may not be able to get cover; Pure Protection Plus is less attractive; The product names are not very self-explanatory.
Website: http://www.the-exeter.com
Rating (max 10): Innovation: 8. Overall: 8.5. Gold
Tags: IP; The Exeter