Income Protection  

Why income protection is evolving

  • List the common causes of income protection claims.
  • Describe how income protection is evolving beyond the core insurance product.
  • Identify the role of critical illness cover and how to look beyond the claims statistics.

With a heavier self-employed, manual occupation mix (with no statutory sick pay to fall back on), the likelihood and need to claim for such conditions may be higher.

For policies with waiting periods of one week or under, viral infections also feature highly – tending to lead to short-term claims lasting just a few weeks.

Additional support and benefits from IP, without a full claim

The core benefit of insurance is a financial one – the amount of cover.

Yet IP is evolving and is increasingly more of a ‘service’.

Not only does IP offer financial support, it can also offer a more holistic means to help people recover and get their lives back on track.

We are also seeing cover stretching beyond the person insured to include the wider family – mainly for children, but also older dependants.

Not all of these additional benefits and services are included in the terms and conditions of the IP contract and so are not reported in traditional claims stats.

Yet they offer meaningful practical support and value to clients and their families, and we find that they are often valued higher than the insurance benefit itself.

Excellent examples of rehabilitation support, additional treatment and back-to-work services were highlighted in the real stories of the 7Families initiative.

It is now the norm for insurers to employ their own team and/or partner, with specialists such as RedArc, Best Doctors and Innovate to provide individual focused all-round support.

When advising potential IP clients it is now really important to consider the availability of ancillary bolt-on benefits. These can include fracture cover, hospitalisation benefit and death benefit, and many of them are available without having to make a full claim on the IP policy.

Many IP products are now expanding to offer support when a policyholder’s life and income might be impacted by life events happening to those around them – such as carer cover (if they need to take time out to look after a dependent relative) and parent and child cover.

We are also seeing IP offering more everyday ‘living’ type of protection – offering access to more practical support and to experts for life’s everyday worries.

Such services deliver meaningful value for clients, and can include the likes of remote access to GPs, physiotherapy and psychological/counselling support, legal helplines and second opinion services.

Income protection, critical illness cover and cancer

The most recent estimates suggest that one in two of us will be diagnosed with cancer in our lifetime.

The disease leads to nearly a quarter of all our white collar IP claims at LV and it remains the leading cause of critical illness (CI) claims.