Aviva has launched the first relevant life plan with integrated critical illness cover in a move that could shake up the market, according to advisers.
The provider has introduced two new business protection products on the Aviva Life Protection Solutions (ALPS) online platform, with the relevant life cover being joined by a life and critical illness plan for business clients.
The inclusion of critical illness benefit as an option on Aviva’s relevant life insurance - which provides individual death in service benefit for an employee - represents a significant change for the market, making it easier for advisers to cover their clients’ business protection needs in one application.
Through the platform, advisers will be able to quote and apply for the new business protection products with interactive underwriting and an expected straight-through rate of around 75 per cent.
The self-serve function allows advisers to deal with case administration at a time and place that suits them, with all policy documents stored online for simple access.
The platform provides a full online quote, apply and track facility, with multi-product applications and an enhanced protection promise up to £1m benefit, recognising the higher average case size for business protection.
Business protection advisers also get end-to-end support from Aviva through a support line and specialist account managers, including a dedicated team for high value cases, providing pro-active support and help with any underwriting, tax or trust queries.
Louise Colley, managing director of protection at Aviva, said: “Historically, relevant life policies have tended to only include a death benefit and terminal illness benefit, so I am delighted that following extensive research and advice from external legal counsel, we are able to offer a fully-compliant critical illness benefit on our new relevant life insurance.
“This is a market first and we believe that it will really help advisers write more protection business more easily.”
Alan Lakey, senior partner at Highclere Financial Services, said this initiative was the first of its kind and could “shake up the market”, with new opportunities for advisers looking for tax-efficient solutions.
He said the new plan is identical to the existing Aviva personal cover plan, albeit without any children’s cover.
It covers 43 100 per cent payment conditions and a further 11 additional payment conditions, as well as terminal illness cover. The plan can be taken out for a minimum one-year period and can run until age 75.
Mr Lakey’s verdict was that it is an industry breakthrough. “Previously, a number of insurers had investigated the potential for such a plan, but had been unable to navigate the onerous requirements of legislation.
“Aviva’s legal advisers have succeeded where others failed and this plan is capable of creating a whole new target audience for critical illness.”
Mark Dennison, the owner of protection specialist LightBlue UK, stated: “Adding critical illness to relevant life and allowing one application across different products gives the client and their adviser more options in the way they write business protection cover.”
peter.walker@ft.com
