LV= has launched a new underwritten income protection product for clients who are harder to insure. Personal Sick Pay, which has been developed in response to adviser feedback, is for clients who do jobs which are more expensive to insure, such as teachers, nurses and drivers.
It is also targeted at those whose professional situation means it is harder to prove their earnings, such as the self-employed or those who move jobs often.
It provides ‘own occupation’ cover with a full or two-year budget version available, and is available alongside critical illness and term insurance. The price you pay each year is based on a client’s age and increases as they get older.
If a client normally works at least 30 hours a week, they will be able to receive up to £1,000 a month insurance. For clients who want to receive more than £1,000 per month, LV= will provide cover of up to 60 per cent of their earnings before tax (or 60 per cent of net profit if they are self-employed).
Since protection products are invariably hard to sell where they are not compulsory, it is important for the providers to make them as accessible as possible.
One benefit of Personal Sick Pay is that not only does it provide cover for people who are harder to insure, but it does not differentiate between those professions. Premiums are not affected by a client’s job, nor are they affected by whether or not the client smokes.
As long as a client works at least 30 hours a week, they can have up to £1,000 a month insurance, which will not be reduced, even if the client receives other sick pay or insurance.
All of these factors work together to make it a more appealing proposition for people who have, until now, been frozen out of income protection. It remains to be seen whether it will prove to be popular, but it serves a clear purpose, and being available on all major portals means it is an accessible product.