Protection specialist LV has stopped offering the work tasks definition of incapacity and moved all of its income protection cover to an own occupation basis, continuing a trend that has been witnessed across the market following past controversy over claim rejections.
From today (25 March), the provider said it will only offer own occupation income protection, meaning the 325 jobs currently covered will move from their current tasks definitions. The company is also increasing the number of jobs eligible for LV income protection by 225.
LV said in a statement that own occupation cover will apply for the lifetime of the policy, and for the length of any claim.
The move follows that made by rival Aviva six months ago in October 2013, when it was hailed for becoming the first provider to offer income protection on a fully own occupation basis.
Other insurers have also sought to increase the number of own occupation cover available inder income protection, though few have offered to move to underwriting on this basis for 100 per cent of policies.
For example, Bright Grey and Scottish Provident said in October that 95 per cent of policies will be written on an own occupation basis.
Under changes announced by LV, homemakers will also have access to simplified cover that allows them to make a claim if they are either unable to prepare a meal or do basic housework. The level of cover a homemaker can take out has been increased from £1,250 a month to £1,500.
Clients who become unemployed after their policy starts or take a career break will also now be able to keep their own occupation cover for the first year. After one year they will be offered homemaker cover.
The maximum age for income protection has also been raised to 70 across all occupations, where it was previously lower for some roles including teachers.
Martin Sincup, income protection manager at LV, said: “We believe that products that protect an individual’s income should be the cornerstone of any sound financial plan. We have decided to solely provide own occupation income protection cover as it is the best definition.
“Moving to own occupation cover makes it simpler for both clients and advisers to understand when we will pay out and easier for clients to claim on.”
He added that the changes will give more people access to cover which will pay out if they are unable to work for a long period of time due to an accident or sickness.
To read more about the importance of own occupation cover in income protection, read our CPD accredited article here.