VitalityLife has introduced a number of changes to its existing Income Protection (IP) plan. These include:
· Public sector plans
Bespoke deferred periods are now available for a wider range of public sector employees, including all NHS doctors, surgeons and nurses; public sector teachers, and council workers. For these public sector employees, the benefit will be aligned to their employer sick pay scheme.
· Earnings Guarantee
An improved Earnings Guarantee means if a customer’s earnings when they claim are less than their Earnings Guarantee established at the start of the policy, the higher level of benefit is paid.
Enhancements also mean customers now have up to six months from the start of the plan to validate monthly insured benefits between £1,500 and £8,000 a month.
Vitality now automatically validates monthly insured benefits of less than £1,500 per month. This means customers with benefits less than that no longer need to validate their income at the outset of the policy.
· New Hospitalisation Benefit:
Customers with Comprehensive Income Protection plans will now receive £100 a day for up to 90 days in total, if hospitalised for more than six days during their plan’s deferred period.
· Changes to short term IP Plans:
Customers can now make multiple claims for the same cause of absence, as long as they return to work for more than six months in between claims. Customers with Primary, Comprehensive and Short Term Income Protection plans are now able to insure up to 60% of their income up to £5,000 a month and 50% thereafter.
Comment: Vitality says research has shown that 80% fewer people have IP cover, compared to the number of people who have life cover. However, IP sales look to be making something of a breakthrough over the past couple of years, both suggesting the timing of updating this plan is good.
These changes are all useful upgrades and will mean in some cases that VitalityLife will now be on an adviser’s shortlist for a particular IP client, when it might not have been before.
Plus points: A range of useful upgrades that widen the plan’s appeal; Good coverage to meet public sector workers’ particular IP needs; IP is now becoming more popular with advisers as well as clients.
Not so plus points: The six month threshold for multiple claims will mean some claimants will not be able to claim if they return to work too early; Earnings guarantees only apply in limited circumstances; Many advisers find IP to be a complex product to advise on.
Rating (max 10): 8. Overall: 8. Gold
Tags: IP: VitalityLife