Protection provider LV= has launched a simplified protection product, called sick pay insurance, which offers up to £1,000 a month cover.
It is designed for people aged between 17 and 45 who want to protect themselves against being unable to work due to sickness or accident but do not traditionally seek financial advice.
Apart from five occupations – armed forces personnel, divers, miners, fishermen and professional sportspeople – consumers are covered against not being able to do their own job.
The cost is based on the number of hours they work and not on their occupation. For customers who work between 16 and 29 hours, they can have £500 cover costing £10 a month.
People who work more than 30 hours a week can choose from £500, £600, £700, £800, £900 or £1,000 cover, costing £10, £12, £14, £16, £18 and £20 a month, respectively.
No existing sick pay, insurance pay-outs, or any state benefits are paid out so any claim will be paid in full as long as the person was still working the number of hours the claim was based on.
Once someone has been unable to work for four weeks, the product can pay out for a total of 12 months and multiple claims can be made for the same condition, as long as the customer has not suffered from the medical conditions in the two years before applying.
Cover runs until 70 and premiums are guaranteed for the first five years.
The plan is being marketed to LV=’s general insurance customers initially, with a full launch to direct consumers or through corporate partners in the coming months.There are no plans to offer it through intermediaries at present, although LV= does not rule this out.
LV= head of protection Mark Jones says: “We know there is a huge gap in the number of people that have their income protected, when it is one of the most important and relevant things for people to insure. We want to help raise the profile of the need for people to protect their income, with a simple, quality and good value proposition. Our aim is for sick pay insurance to sit very much in the retail space, and feel similar to buying something from a major online retailer.
“We have spent a lot of time making the buying process clear and simple. This includes interactive questions to help people understand what they are covered for, and transparent examples of when a claim can and cannot be made.”