The plan aims to provide policyholders with a regular benefit to replace
lost earnings if they cannot work due to illness or an accident. Jobs rated
class one professional, such as solicitor and accountant, and classes one to
three are based exclusively on the own-occupation definition of incapacity.
Class four jobs, such as builder and mechanic, are regarded as higher risk
and are initially based on an own occupation definition of incapacity. This
changes to a more onerous suited occupation definition after 12 months.
Policyholders can choose from a range of deferred periods between four and
52 weeks, but the minimum is eight weeks for class four jobs. The plan
provides cover of up to half gross income subject to a £120,000 a year
Rehabilitation benefit, which is part payment of benefits where the
policyholder returns to work part-time following a claim, is automatically
included. Proportionate benefit, where the policyholder returns to a lower
paid job after a claim, is also automatically covered. Illness benefit,
medical expenses benefit and children’s cover if a child is diagnosed with a
critical illness are also featured.
A choice of level or increasing cover in line with the Retail Price Index up
to 10 per cent a year is provided. Guaranteed insurability options are
available to policyholders experiencing events such as getting married or
having a child, or a change in their mortgage. The plan’s flexibility is not
limited to these events, as benefits or the retirement age policyholders
choose at the outset can be increased, but this would be subject to further
assessment of health and earnings.
The company prefers online submissions and there is a facility on its
website to track the application during the underwriting process. Commission
tracking and a document library is also available online.
This plan could fill a gap in the market by providing people in higher risk
occupations, who arguably need income protection the most, with access to
cover based on the least onerous definition of incapacity. However, this
will be reflected in the cost and is inevitably restricted for class four
occupations. Premiums are guaranteed, but the down side is no option to
lower costs through reviewable rates.