Tuesday, 8 May 2001.
Select Protection Plan
Type: Cafeteria style protection plan covering critical illness, income protection, life and houseperson's cover.
Minimum premium: £7.50 a month, £75 a year.
Maximum cover: £1m.
Illnesses covered: Alzheimer's disease/pre-senile dementia before age 65, angioplasty, aorta graft surgery, bacterial meningitis, benign brain tumour, blindness, cancer, coma, coronary artery by-pass surgery, deafness, heart attack, heart valve replacement or repair, HIV/AIDS, HIV/AIDS from a blood transfusion, kidney failure, loss of limbs, loss of speech, major organ transplant, motor neurone disease, multiple sclerosis, open heart surgery, paralysis/paraplegia, parkinson's disease before age 65, stroke, third degree burns, permanent and total disability before age 60.
Minimum-maximum ages: 17-55.
Minimum premium: £10 a month, £111.48 a year.
Minimum-maximum ages: 17-55.
Deferred period: Choice of 4, 13, 26 or 52 weeks.
Definition of disability: Own occupation.
Options: Life cover, houseperson's cover, waiver of premium.
Commission: Subject to negotiation.
Tel: 0845 7573036.
David Wingar – Partner, Courts Independent Financial Management
Malcolm Mitchell – Joint managing director, Plan Insure
Ian Crossan – Director, Thomas Gibson
Broker Ratings (ave. marks out of 10):-
Company's reputation: 7.7
Premium rates: 7.2
Range of illnesses: 8.3
Product literature: 8.3
Friends Provident has introduced its select protection plan, a cafeteria-style protection plan.
When asked how the plan fits into the market, Wingar says: “This could fit very well. Other assurance companies have tried to package private medical insurance and life assurance. Friends Provident have been competitive in both areas.”
Mitchell feels that the plan will fit well into a relatively restricted marketplace, as there are not many providers offering the menu structure approach.
Crossan echoes this sentiment, and says: “As an arrangement designed to provide a range of flexible benefits, I believe that it certainly does have a place in the market. However, as this is a fairly new concept within the market, it may take some time for the potential to be realised.”
Turning to the type of client the plan may be suitable for, Mitchell says: “The product is well suited for many clients. The self-employed in particular will benefit from this combination of life cover, critical illness and income protection and in addition the mortgage market is ideally suited to this type of contract.”
Crossan feels that: “There is no specific client that this arrangement is aimed at, as it is designed to provide for the changing needs of the individuals throughout their lifetime. However, it would seem that if the benefits were to be prioritised, income protection would be at the head of the queue.”
Wingar thinks that it is suitable for those in a domestic situation, but not for corporate situations.
On the subject of the marketing opportunities that the plan will provide, Crossan feels that it will be useful when reviewing term assurance arrangements that were put in place a number of years ago, as he thinks that it will add greater flexibility.
Wingar says: “I will be inclined to recommend this packaged product as there is only one set of underwriting.”
Mitchell picks up on two areas of possibility: “IFAs will be able to market this plan to their mortgage related clients as well as using it for family protection purposes.”
Moving on to the main useful features and strong points of the plan, the panel look at different aspects of the product.