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LV= launches income protection product for harder to insure clients

29th May 2014 Print

Protection specialist LV= has launched a new underwritten income protection product, ‘Personal Sick Pay’.

‘Personal Sick Pay’ has been developed in response to adviser feedback and is for those clients whose jobs are typically more expensive to insure - like manual workers, tradespeople, teachers, nurses and drivers. It also offers income protection cover for clients whose situation makes it more difficult to prove their earnings, such as those who are self-employed or regularly move jobs.
Personal Sick Pay provides ‘own occupation’ cover with a full or two year budget version available. It has also been built in LV=’s Flexible Protection Plan, so it’s available alongside critical illness and term insurance, the first time a product like this has been available in a menu.
The price a client pays each year is based on their age that year so will normally go up with age, and the cost is not affected by their job type, or whether they smoke. Future prices are made available to advisers and their clients up front, with the option for either reviewable or guaranteed future price tables.
If a client normally works at least 30 hours a week they can have up to £1,000 a month insurance, with no financial checks at application or claim, regardless of any other income being received, such as sick pay, other insurance or state benefits.  LV= will provide cover of up to 60% of a client’s earnings before tax (or 60% of net profit for the self-employed), for those who want more than £1,000 a month.
Clients can also choose ‘back to day one’ cover which means LV= will pay out from the first day they stopped working, as long as they’re off for three days in a row. This is a useful feature for advisers whose clients wouldn’t receive sick pay, for example those who are self-employed or contract workers.
Richard Rowney, Managing Director of LV= Life and Pensions said: “As market leaders in intermediated income protection we wanted to provide a quality alternative solution in the ‘harder to insure’ space. Anyone can get sick or have an accident at any time, but the risks increase for clients in more physical or stressful jobs – so income protection can usually be expensive for them. We can now offer quality own occupation cover for a greater number of people at a much lower starting price through Personal Sick Pay.”
“When designing this product we worked hard to ensure that, like our existing protection products, it is easy for advisers and their clients to understand the level of cover they would receive, and how much they would be paying for it. We are pleased to be able to offer the first £1,000 a month with no financial underwriting at application or claim, and are grateful to all the advisers who took the time to feedback and help us shape our proposition in a way that makes it truly meaningful for clients. We hope that our latest product will give advisers yet more reason to talk to clients about the importance of protecting their income”