Holloway Friendly Society is introducing non-reviewable rates on its classic plus income protection plan.
It says the move is designed to end uncertainty about the future cost of premiums. Rates now only increase with age.
Chief executive David Macgregor says: “The problem with income protection is the way some providers can increase premiums within a short time of it being taken out in a way that is beyond what would be expected with advancing age. Often, the increase is based on the company’s income protection book as a whole rather than the individual case in question.
“Historically, some providers have placed absolutely no restrictions on how much they increase premiums by. This is unfair to the consumer and to the IFA. We are guaranteeing our rate table so, once the policy is active, we are unable to increase premiums beyond the limits set out in our rate table.”
Holloway is also increasing its own-occupation definition of incapacity from 12 months to 24 months.
Friends Provident’s income protection plan has a level premium which does not increase with age but it loads for gender, occupation and smoking.
Highclere Financial Services partner Alan Lakey says: “The problem with reviewable premiums is the unknown factor of what they will rise to, so this is very much a step forward and will put Holloway at the forefront of providers offering income protection to people who cannot normally get it.”