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Business protection is where it’s at

Following Friends Provident’s move into the business protection market after its reshuffle last month, Bright Grey is the latest to give it a whirl.

Royal London’s protection arm launched its new product yesterday after a fair bit of speculation. The product covers key person, loan protection and ownership protection as well as key person income cover for sickness, which the firm believes is the clincher.

Bright Grey has increased underwriting limits for life cover to £1m and £350,000 for critical illness cover and all its business protection customers will have access to its Helping Hand rehabilitation program.

National partnership manager Jerry Bayman says: “With an estimated value of more than £500bn the potential for advisers to develop the business protection market and create genuine new business opportunities is huge.”

In other product news Shepherd Friendly Society has launched a payment protection insurance/income protection style plan which is designed to last as long as a consumer’s fixed-rate mortgage and can therefore run for up to five years.

It is own occupation and does not rate on occupation or whether the applicant smokes or not. It offers tele-underwiting and can cover up to 130 per cent of your mortgage payment and pays out after a month.

Highclere Financial Services partner Alan Lakey says the plan is very good value for younger people but for those over 40 it gets a bit pricey.

He says: “Obviously a fully comprehensive income protection plan is the ideal but this policy offers people an option and for younger people it is really competitive.”

There’s more from Bright Grey, with product director Roger Edwards believing providers will not move back into the pre-funded long-term care market until the FSA relaxes its regulations.

The introduction of the CF8 LTC qualification for advisers in 2004 seriously limited distribution and as a result Partnership Assurance is the only remaining provider, although Lincoln Financial Group launched a CI policy with an LTC bolt-on last year.

Bright Grey used to offer an affordable LTC option with its income protection product that paid regular income to fund care but this was scrapped because it had to be sold by CF8 advisers.

Edwards says: “This qualification will always be an inhibitor. Providers have got to have a distribution channel. Funding for long-term care is on the political radar at the moment so the FSA may well be told to go away and rethink current regulation. If things do not change, it is unlikely that any provider will move in.”

And lastly Direct Life & Pensions is a happy company.

Its new business figures for January leapt by 64 per cent from the same time last year. The firm received 7,100 proposals compared with 4,300 in January 2007.

DL&P signed deals with several companies in 2007 to provide its Intelligent Protection software, most notably with Network Data, Aberdein Considine, Motley Fool and Dunfermline Building Society.

After factoring in the new partnerships, the firm expected to receive around 5,300 proposals in January but exceeded its new business expectations by 33 per cent.

Sales and marketing director Richard Verdin says: “Here is encouraging news confirming that customers really do want the products that are available when they are offered.”

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