Holloway Friendly Society is offering an income-protection product which it says differs from traditional offerings as it will not negatively affect people in higher-risk occupations.
The society claims the New Classic Plan has been designed to overcome the consumer drawbacks of income protection. Only 11 per cent of the UK workforce are covered by IP.
The plan features no loadings for occupation, gender or smoking and has an own-occupation definition, meaning policyholders are not expected to work in other employment areas if they cannot carry on in their own sector. It covers up to 60 per cent of earnings or £36,400 a year, with full benefit for 52 weeks of incapacity and 50 per cent thereafter. There is also an investment element and tax-free cash sum at retirement.
Life Policies Direct director Jason King says: “I like it because they are being a bit innovative in removing the occupation code. The higher-risk people are paying for the lower-risk people and Holloway runs the risk of positive selection against them as they will attract higher-risk clients. I do not like the investment link.”
Lifesearch senior technical manager Kevin Carr says: “It is very much for a specialised market. It is perfect for female, smoking HGV drivers.”