Pioneer covers bills and things
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Bills & Things
Type: Individual income protection plan
Minimum benefit/minimum premium: £500 a month/£9.99 a month
Maximum benefit: £1,000 a month
Minimum-maximum ages: 16 to 60 at entry but cover lasts until age 68
Minimum term: One year
Deferred period: Four weeks
Definition of disability: Own occupation
Commission: Subject to negotiation
Contact: 0300 123 3203
Bills & Things is an income protection plan designed for the short term. It is based on an own occupation definition of disability and provides maximum benefit of £1,000 a month for one or two years at a time, although cover can last until the policyholder reaches age 68.
Highclere Financial Services partner Alan Lakey likes this product. He says:"This is an innovative product which deserves to succeed on a big scale. Pioneer does not have high name awareness which is why it tends to be used primarily by protection specialists. Once the general adviser becomes aware of the plan benefits, this position may change.
Putting the plan into its market context, Lakey says: "Advisers must be tired of hearing the same old chant that income protecvtion is massively undersold, or under-purchased for any RDR enthusiasts reading. Something needs to be done.
Lakey says that providers have been content to sit back and wait for consumers to buy their products for too long. These are often plans with inappropriate designs and unattractive rates. "Correspondingly, manyadvisers have been deterred from entering this area due to concerns about product design and the potential for client dissatisfaction," he says.
Lakey adds that recently, a number of providers have enetered the arena or have introduced attractive propositions planned to appeal to advisers and consumers. "Pioneer's latest offering falls securely in to this box as it is specifically desgined to fill the barren middle ground between the quality income protection plans and the consumer-appeal simplicity of payment protection insurance plans.
"The big difference is that unlike standard income protection plans, no income evidence is required and a monthly income of up to £1,000 canbe obtained. This is extremely important because those unable to prove an income of £20,000 plus are generally unable to obtain £12,000 a year elsewhere."
Lakey feels this plan offers great attractions, especially for the self-employed whose net incomes are frequently reduced by creative accountancy.
"Income payments are limited to two years and all plans enjoy a four-week deferred period. Most importantly, all applicants receive an own occupation claim definition which contrasts with many income protection plans," says Lakey.
He notes that there are only two exclusions, both reasonable in his view. "Overall, the plan meets every requirement that one could reasonably ask for," he says. He also thinks that commission reflects the reality that it is short-term income protection plan and this should help advisers to take an interest.
Discussing the potential drawbacks, Lakey says: "There is nothing I dislike. It is ideally suited for its target market. Clients looking for cover beyond a two-year payment period are able to look at other types of plan."
Scanning the market for potential competitors, Lakey says: "Forresters Life has introduced a similarly designed product which, while not as good or as wide-ranging, will still appeal to some consumers. Thelimited payment pl;an from Aviva, as well asthe M&LP plan from LV= will also provide competition for the lower-risk occupations."
He concludes that the low-cost product from the Cirencester Friendly Society is always well received by clients.
BROKER RATINGS
Suitability to market: Good
Flexibility: Good
Premium rates: Good
Adviser remuneration: Good
Overall 9/10
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