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Product matters

Several providers have recently become new entrants to the business protection market in an attempt to expand their market share.

It is interesting to see how the established players respond to these moves. Hopefully, product innovation and the development of policies to appeal to a wider market will mean a move away from the much debated price war.

Unum is a main player in group protection and has launched a dual benefit group income protection product aimed at small and medium enterprises. For smaller businesses, the problem of employee absence through sickness will often mean there is a need to provide benefits for the employee and the employer and this is what makes this product attractive.

In addition to the employee benefit, monthly business benefit is paid to the employer to manage issues such as temporary staff replacement. Policies can have a deferred period of as short as four or eight weeks as opposed to the standard 13 or 26 weeks which prevail in the wider market. This will be particularly useful to smaller businesses which have greater cashflow restrictions.

I like the provision of an automatic lump sum to employees who remain incapacitated from one of a number of serious illnesses on expiry of the benefit term.

This feature, comb- ined with support from vocational rehabilitation consultants should attract this product to IFAs wanting to add value to their advice process.

Peter Chadborn is principal of CBK

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