LV= announces enhancements to protection offering
Protection specialist LV= has announced enhancements to both its income protection and critical illness cover.
The income protection improvements include a £1000 benefit guarantee and an increase in the maximum age the cover can expire to 70. LV= has also increased the percentage of salary that can be covered to 55%, and removed the ‘suited' occupation definition, defining more roles as ‘own occupation'. This comes as a direct result of adviser feedback calling for more simplicity on occupation definitions. Nearly 80% of the occupations LV= covers are now on an ‘own occupation' basis, and includes teachers, doctors, dentists, midwives, nurses and surgeons, roles which can often only be covered under ‘tasks' or ‘any occupation' definitions.
On its critical illness product the enhancements include an increase in the maximum age at expiry to 70, and extending the maximum term to 40 years for guaranteed premiums. In addition, LV= has increased the number of children's illnesses covered to equal the conditions covered on the adult critical illness cover.
Mark Jones, LV= head of protection, said: "‘We are constantly striving to make improvements to our protection offering and these enhancements strengthen our income protection and critical illness proposition further. In addition these changes and developments will be of significant benefit to consumers and to advisers who will be able to offer greater flexibility and support to their clients."
Further details and changes to LV='s income protection and critical illness cover (which forms part of the protection menu, the Flexible Protection Plan) includes:
LV='s Defaqto 5 Star rated income protection:
£1000 benefit guarantee: LV= now guarantees that if your income has fluctuated leading up to a claim, your claim will be based on £1000 a month in benefit (if you are insured for this sum or greater). If less than £1000 is covered then the sum assured will be paid.
Increase in maximum age covered: LV= now offers income protection cover to age 70 for 94% of occupations covered, to reflect an increasing state retirement age.
One and two month deferred periods available for all occupations: Previously, a one or two month deferred period was only available for occupations rated class one and two. Now, all 774 occupations in rate classes three and four can also choose a one or two month deferred period, along side the three, six, 12 and 24 month deferred period options already available.
Removal of suited definition / increase in numbers of own occupation roles: LV= has increased the number of occupations covered under the ‘own occupation' claim definition. A total of 1170 occupations are now covered under ‘own occupation', with 326 occupations covered under the ‘tasks' definition. This means that 78% of the occupations LV= covers are on an ‘own occupation' basis, now including teachers, doctors, dentists, midwives, nurses, and surgeons.
Increase in percentage salary allowed: LV= will now allow up to 55% (previously 50%) of income before tax, or 55% of net profit for the self employed, to be covered as a monthly benefit, making any benefit paid on claim closer to the total net salary the claimant previously earned.
Reviewing three years income instead of one year for self employed claims: LV= now looks at an earnings average over the three years before a claim is made for the self employed, rather than one year. For the employed, LV= continues to look at the previous 12 months earnings.
Extensions of rehabilitation benefit to expiry age of plan: Currently rehabilitation benefit ceases at age 60, irrespective of the expiry age of the cover selected. LV= will now offer rehabilitation benefit to match the expiry age of the cover.
LV='s critical illness cover now includes:
Increase in maximum age: LV= has increased the maximum age at expiry for critical illness cover to 70. The maximum age at expiry for the inflation-linked life cover element of combined life and critical illness cover has also been extended to age 70.
Increase in maximum term: The maximum term for both guaranteed and reviewable premiums for critical illness cover is now 40 years.
Increase in number of ABI+ definitions: LV= has increased the number of ABI+ definitions offered by five, taking the total number of ABI+ conditions to nine.
Increase in number of conditions covered: LV= has increased the number of conditions covered under critical illness, taking the total number to 38. Cover now includes partial payments for low grade prostate cancer and mastectomy, and full payment for open heart surgery.
Increase in number of children's conditions covered: LV= has increased the number of conditions covered from 20 illnesses to 37 to equal the conditions covered on the adult critical illness cover (excluding total permanent disability, TPD)
Increase in guaranteed increase option entry age: LV= has increased the maximum age at which customers can exercise their guaranteed increase options from 49 to 54. The guaranteed increase options allow customers to increase their level of cover on certain specified events, including:
Marriage or civil partnership
Childbirth or legal adoption of a child
Divorce or dissolution of civil partnership
Mortgage increase
Splitting a joint life policy on separation
Reduction in decreasing term run down rate: Previously the sum assured on decreasing term assurance and critical illness policies decreased each year based on an assumed interest rate of 7.5%. Now the assumed interest rate is 6% reflecting the current low interest rates.
Decreasing term run down moving to a monthly rate: Previously for decreasing term assurance and critical illness products the sum assured decreased at the end of each policy year. Now it will decrease on a monthly basis to be more closely aligned with the reducing amount owed on a typical capital and interest repayment mortgage.