LV will now offer payment breaks permanently, meaning customers can stop paying premiums for up to three months without losing cover.
The provider said more than 300 clients had benefitted from the policy since it was put in place in April 2020, at the hight of the first wave of the Coronavirus pandemic.
The vast majority of those, 93 per cent, were self-employed, who would have had little state benefit support and no employee benefits had they been unable to work due to illness or injury, it said.
We see many households across the UK struggling.HarperJustin Harper, propositions and marketing director at LV, said: “LV payment breaks were developed with vulnerable customers in mind, allowing us to step in quickly at the height of the pandemic to assist those facing financial difficulties.
"It is crucial in times of financial hardship that policyholders continue to have access to the support they need and are able to keep their valuable existing cover in place, which we’re able to provide through our Payment Break option."
The payment breaks are offered a month at a time, for up to three months with no requirement for premiums to be repaid.
Members that qualify are still able to make a claim, as their cover will remain in place in line with the terms and conditions of their policy.
But not everyone is eligible.
LV said the option is mainly available to members considered vulnerable, meaning they are unable to pay premiums due to mental or chronic physical health issues, or bereavement of a close family member.
It will also consider those financially struggling due to Covid but who are still employed or self-employed.
They will need to have a policy that’s been in force for 12 months or more and a good history of premium payments, as well as not utilised a payment break before.
Their income must be below £50,000.
LV said staff have been put in place to help members find alternative options before committing to a payment break.
Harper said: "We continue to embed vulnerable customer considerations into our culture, practices and processes, ensuring we support advisers and their more vulnerable clients.
"This is even more relevant as we see many households across the UK struggling to contend with increasing costs for their food, energy and fuel.”
Adviser Lewis Shaw, founder of Mansfield-based Shaw Financial Services, said payment breaks were a "gimmick" but they were "useful for incomes which are sporadic".
Lewis Shaw: 'Payment breaks are useful for incomes which are sporadic'
He said: "[It's] great that the protection isn't lost. It should be noted most protection providers won't cancel cover straight away and tend to give a good few months where the protection is in place.
"The difference is that other providers will want the premiums to be brought up to date."
According to LV's latest Wealth and Wellbeing Monitor, which surveyed 4,000 UK adults online in December, almost half of self-employed people (47 per cent) said their financial situation had worsened in the final quarter of the year.
About a third (30 per cent) described themselves as struggling financially, while 44 per cent worried about money.
One in five self-employed had asked a mortgage provider, insurance provider or bank for flexibility, compared to 4 per cent of all consumers.
Going it alone
LV meanwhile, has decided to continue as an independent brand, suggesting a takeover or merger deal is no longer on the cards.
In a letter to members incoming board chairman Seamus Creedon said in light of LV’s “improving business performance” over the past 18 months the mutual was now “appropriately capitalised and trading well”.
This marked a U-turn on LV's previously stated position, which was that the mutual was in need of so much investment that the risks of remaining independent were "too high".
Royal London and LV abandoned merger talks last week after concluding a deal would not be in the best interests of their respective members.
This was after a potential deal with private equity firm Bain Capital, which would have seen LV demutualise, had also fallen apart.
carmen.reichman@ft.com
