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Product matters

Pioneer Friendly Society has further flexed its income protection credentials with its latest innovation – professional income protection (Pip).

Pioneer is normally known for offering the same premium regardless of the client’s occupation, gender or smoking status. This has inevitably led to it being known as a company to use for higher-risk applicants.

It has now signalled its intention to grab a bigger slice of the mainstream IP market with this latest plan aimed exclusively at professional workers.

Pioneer has demonstrated a keen understanding of the IP market as some of the thorny issues normally associated with competitor IP products have been stripped out. There are no standard exclusions, no deduction for state benefits and no financial underwriting at the claim stage so no need to worry about policyholders being over-insured and having claims scaled back.

The maximum level of cover is just 40 per cent of earnings and in a change of approach for Pioneer, premiums will vary by gender/smoking status and they rise automatically as the policyholder gets older which could be an obstacle for some.

However, the rate bands are guaranteed at outset so the policyholder knows what future premiums will be and as most policyholders will experience an income that at least grows with inflation, then increases should be affordable, plus this is a useful way of making cover affordable in the early years.

Jason King is life insurance director at Torquil Clark


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