Zurich has introduced a concept aimed at overall protection. It is offering two precisely descriptive variations – the level protection plan and the decreasing mortgage plan. They offer a menu of life insurance, critical-illness cover and income protection with optional permanent and total disability cover and waiver of premium.
Viewed as merely a life and/or critical-illness plan, the Zurich offering is not particularly special. The critical-illness definitions pretty much mirror the Association of British Insurers wordings but it is when you factor in the income protection cover that the plan assumes a superior posture.
Confusingly called payment protection benefit, which implies a form of premium waiver, this option offers monthly benefit of up to 1 per cent of the associated lump-sum benefit. Someone protecting a £100,000 mortgage could receive up to £1,000 a month tax-free income after a deferred period of three, six or 12 months.
Zurich scores against the opposition in two areas. First, it offers own occupation on all normal occupations although those in higher-risk occupations are switched to suited occupations after 12 months. Second, premiums can in some circumstances be noticeably cheaper than buying individual plans.
Zurich currently has the lowest percentage of rejected claims at 7.5 per cent, something that both advisers and clients can gain comfort from.
Alan Lakey is a partner at Highclere Financial Services