The premium reduction option is available to those with income protection, critical illness, life insurance and business protection policies. Customers with a policy starting before March 1 can reduce their cover and premium for up to six months.
The sum assured can be reduced by up to 75 per cent, subject to a minimum monthly premium and sum assured limits. For most policies, a monthly premium of at least £5 applies, LV said.
After the six month period, LV will automatically revert the cover and premium to the original amounts without further underwriting.
Debbie Kennedy, director of protection at LV, said: “The coronavirus outbreak is affecting everyone differently… That’s why we want to do all we can to provide our members with options to support them through this time and help them keep their valuable cover in place.
“Through our latest premium reduction option we can now offer more of our members some much needed financial relief, with the reassurance that some cover remains in place.”
The change comes after the provider introduced payment breaks last month for qualifying protection policyholders in response to the coronavirus.
According to LV it has arranged payment breaks for 87 customers in the first month, the majority (92 per cent) of whom were self-employed. Waived premiums totalled £7,650 a month.
Alan Knowles, managing director of Cura and chair of the Protection Distributor’s Group, said: “LV are clearly determined to help as many customers, who are struggling financially as a result of Covid-19, as possible.
“Their first step to waive premiums for those most affected was commendable, and by now adding in the option to temporarily reduce cover for those who are not eligible for waiving of premiums, is fantastic.
“As an adviser we don’t want our customers being forced to cancel cover when they might need it most, and having options such as those provided by LV can really help keep customers' essential cover in place.”
Robert Harvey, head of protection advice at Drewberry, said: “LV has led the way during this crisis in offering their policyholders a range of options to help mitigate some of the impact on people’s finances as a result of coronavirus, whilst ensuring customers do not lose access to such vital cover.
“The latest initiative is a welcome move and gives policyholders flexibility at this difficult time, especially those who may not qualify for the premium holiday, which is reserved for the most financially vulnerable."
He added: “Any reduction in premium will mean a loss of cover to some degree and so of course should be considered as a last resort, however individuals will still have access to a range of additional services and benefits that LV offer, which may be especially valuable at this time, alongside any reduced cover.”
In an update earlier this month, LV said it had paid out over £2.5m for nearly 300 coronavirus-related claims.
chloe.cheung@ft.com
