In protection we often talk about three core products – life cover, income protection and critical illness cover, however the types of insurance available can be a lot broader than just three categories.
There are many lesser known forms of protection (from the sublime to the ridiculous) that could offer clients another option when financially planning for the future.
Here are 10 types of cover you might not be aware of, and how they can assist your clients.
1) Day one cover.
Income protection is often highlighted as the policy most relevant for most people, to protect against the financial impact of losing an income.
It covers people long-term (usually up until they are well enough to return to work or retire) and is usually set with claim deferred periods of three, six or 12 months.
However, some insurers, primarily friendly societies, offer cover from day one of being unable to work.
This means that there is no deferred period ahead of making a claim, and policyholders will qualify for the full benefit paid back to day one, once they have been off work for more than three consecutive days.
Iain Clark, distribution and marketing director of British Friendly, said: “Day one cover on income protection offers a valuable benefit, particularly to those who are self-employed or have no form of sick pay or savings to cover a period of lost income.
“Otherwise this would leave them unable to cope financially if they couldn’t work and had to wait for three months or more before an income protection claim could be paid.
“Of course the longer the deferred period the cheaper the premiums so it is essential that this is properly aligned with any employee benefits and savings.”
2) Cover for HIV positive.
Not that many years ago it would have been extremely difficult to offer a client who is HIV positive a way of protecting their life through insurance.
However, research from specialist adviser Unusual Risks shows that today, around 70 per cent of insurers offer some form of life cover for people who are HIV positive.
Chris Morgan, Unusual Risks’ marketing manager, said: “Since 2009 the availability of life assurance for people living with HIV has improved considerably, with a number of insurers now offering cover.
However, the UK insurance industry, still does not offer any form of income protection or critical illness cover to HIV positive people”.
3) Care costs.
Putting adequate financial plans in place to cover the cost of care in later life has long been an issue for financial planning, with a lack of products on the market to cater for such needs.
One option recently launched by VitalityLife is a whole of life insurance policy called lifestyle care that allows people to access the sum assured early if the policyholder has care needs.
Up to 100 per cent of the policy benefit can be used for care, and 20 per cent of the benefit is also payable on early diagnosis of Alzheimers, Parkinsons or Dementia.