Royal London has added extra cover to its income protection proposition.
The improvements include fracture cover, hospitalisation payment and an additional payment on death.
The changes are designed to make sure the products continue to meet clients’ changing needs and are now included as standard.
Fracture cover is up to £4,000 per claim with a maximum of two claims accepted in each 12 month period.
Multiple fractures are covered up to the £4,000 claim limit.
Hospitalisation payment is £100 per night if more than six consecutive nights are spent in hospital during the deferred period including connected claims, up to a maximum of 90 nights during the term.
The additional payment on death is a payment equivalent to 12 months premiums if death occurs during the policy term.
For the accelerated claim on terminal illness the deferred period is waived and monthly benefit paid if diagnosed with a terminal illness with less than 12 months life expectancy.
For the back to work payment a percentage of the monthly benefit will be paid in the first two months after a client returns to work following a claim if they have a 13, 26 or 52 week deferred period.
For example, clients with a cover payment period of one or two years would receive 25 per cent of the monthly payment in month one and 10 per cent in the second month.
The maximum income that can be received as a result of claiming on the protection products has been increased to 65 per cent of the first £15,000, plus 55 per cent of the remaining earnings before tax, up to a maximum of £250,000, to enable clients to protect more of their income.
In addition, changes have been made to what can be taken into account when calculating allowable cover.
For the employed these include regular dividend payments that can be evidenced, a spouse’s nominal income to £11,500, and for the self-employed certain fixed overheads such as rent for premises.
Toby Bainbridge, reinsurance manager at Royal London, said: “According to our State of the Protection Nation report just 4 per cent of adults owned an income protection policy, compared to 6 per cent with critical illness cover and 26 per cent with life insurance.
"The industry is committed to improving the percentage of people protected.
"The inclusion of fixed overheads for the self-employed is an industry first.
"The enhancements we have now included as standard such as fracture cover are designed to help customers when they most need financial support and the changes to the maximum cover are designed to better cater to their needs and protect more of their income.
“Eligible Royal London protection customers can access Helping Hand at no extra cost. This comprehensive support service, combined with the new back-to-work payment provides financial, emotional and career support to help get people back on the road to recovery.
"These additions make our income protection one of the most comprehensive products currently available in the market."
Alan Lakey, director of CI Expert, said it is encouraging to see providers focusing their efforts on improving the design of these plans.
He said: "Income protection is the least purchased of the main protection policies but for many it is the most important because without an ongoing flow of income everything comes to a halt.
"Adding these valuable benefits will prove valuable in encouraging both advisers and consumers to see the worth of such plans.
"Royal London is fast becoming a leading light in adding value to protection plans and this further cements its reputation."
emma.hughes@ft.com
