This product aims to give a regular benefit if the holder suffers illness or accidental injury leadi...
This product aims to give a regular benefit if the holder suffers illness or accidental injury leading to incapacity and a loss of earnings. The benefit can replace lost earnings or, if the holder does not work, it can meet additional expenditure.
Maxima and minima
The minimum monthly premium is £10. The minimum annual premium is £120. The minimum age at entry is 18 attained and the maximum age at entry is 54 attained. The maximum benefit allowable under this plan is £180,000 a year. The plan can end at any age between 50 and 70 inclusive.
Option for benefits to be paid for a limited period
Yes. If the client opts for a limited payment term the total amount that can be claimed for incapacity will be limited to an aggregate maximum of five years' benefit.
Increase the retirement age after start date other than guaranteed insurability options (GIO)
The term can be increased or decreased. However, if any change increases the risk then the additional risk will be subject to revised underwriting. The original plan will remain unchanged.
Increase benefit subject to underwriting
An increase in cover will be subject to a fresh assessment of health, earnings, occupation and pastimes.
GIO available
A GIO is available on:
- The insured person getting married or forming a civil partnership
- The life insured becoming a parent
- An increase in the insured person's share of the mortgage payment due to a home move or improvement, a mortgage discount period ending, or the insured person becoming sole owner of the property following a legal separation
- The insured person receiving a significant salary increase (at least 20%) as a direct result and immediately following attainment of a professional qualification
GIO offered to standard rated cases only
Yes
Maximum age to exercise option
There is no maximum age for the marriage option to be effected. For birth and mortgage increase, the maximum age is 54 attained.
Maximum increase available for GIO
The maximum increase available for the marriage/civil partnership option and the birth option is £250 a month/£3,000 a year. The increase for the mortgage/loan option can be any amount, as long as it does not exceed the maximum benefit amount of £180,000. The maximum salary increase is £500 a month/£6,000 a year.
Benefit amount index-linked
The plan is available with level benefits or an index-linking option. If the latter option is selected the benefit will be increased annually at each anniversary date, irrespective of any deterioration of health, in line with the Retail Prices Index (RPI) subject to a maximum of 12% while in claim, as declared three months prior to the month in which the anniversary date occurs.
Add indexation
Not available after commencement
Number of indexation refusals
No limit
Where selected, indexation applies both pre-claim and during claim
Applicable throughout the term of the plan
Age used when costing indexation increases
Based on the age attained of the life insured. If guaranteed rates are chosen it will be based on the rate table at the outset of the plan.
Waiver of premium available
During any period for which a benefit payment for incapacity is being paid any premium due in that period will be waived. Any revisions to the premium which would otherwise have been made under this plan during such period will become effective at such time (if appropriate) as the premium payments recommence. The waiver of premium deferred period is the same as the deferred period for the income protection (IP).
Guaranteed premium rates available
Yes
Reviewable premium rates
The initial premium for the initial benefit is guaranteed for five years after which the insurer reserves the right to review the premium under this plan every subsequent anniversary date.
Career break available
If policyholders decide to take a career break they will still be able to maintain cover at the level of benefit for housepersons, part-time workers and the unemployed. If they return to work within five years they can increase their cover back to the previous level without medical evidence after they have been at work for three months.
Terminal illness benefit available within the policy
Benefits would be payable if the life insured developed a terminal illness. Terminal illness is an advanced or rapidly progressing incurable illness where, in the opinion of a medical consultant, the life expectancy is no longer than 12 months.
Houseperson cover available
If policyholders do only household work they will be paid restricted benefit if they cannot do at least three of the defined personal capabilities or suffer one of the defined serious conditions. Restricted benefit will not exceed £1,250 a month, however if the index-linking option is selected, index-linked increases will be on top of this amount. A maximum termination age of 60 and a minimum deferment period of 13 weeks will apply.
Proportionate benefit available
If totally incapacitated and, as a result of illness or accidental injury, unable to perform the duties of normal occupation, but undertaking another occupation for profit or reward, the benefit payable will be at a reduced rate of the then total benefit proportionate to the loss of earnings.
Rehabilitation benefit available
If totally incapacitated as a result of illness or accidental injury and unable to perform the duties of normal occupation, but then a return to normal occupation is made and there is a restriction in the scope of such duties, the benefit payable will be a reduced rate, of the then total benefit, proportionate to the loss of earnings.
Relapse benefit available
There is no limit to the number of claims policyholders can make. If they need to claim again for the same cause within 12 months of returning to work, the deferred periods will not be reapplied. However if the limited payment term option has been selected the claim will only be paid for a total aggregate maximum term of five years.
Hospitalisation benefit available
Yes, if clients are admitted to hospital as a result of incapacity for more than seven consecutive nights during the deferred period.
Cover operates worldwide
Policyholders may travel or reside in any part of the world but benefit payments will be restricted to a total aggregate maximum of six months throughout the period of incapacity while they are outside the European Union, UK, Channel Islands, Isle of Man, USA, Canada, New Zealand and Australia. Benefit payments will be restricted to a total aggregate maximum of three years throughout the period of incapacity.
Death benefit available
The insurer will pay this if holders die during the first year of eligibility for benefit, resulting from the same accidental injury or illness. The insurer will pay the equivalent of 12 times the monthly benefit paid, less any already paid.
Benefit percentage limit based on total income
The life insured can choose the amount of benefit they need. However, the maximum percentage of earnings that will be paid out is 60% of the first £25,000 of pre-incapacity earnings plus 50% of the remainder.
Number of salary tiers used in maximum benefit calculation.
Two; below and above £25,000
Notification of a change in occupation Not required
Standard definition of disability
Own occupation
Own occupation definition of disability
Totally unable by reason of illness or accidental injury to follow the material and substantial duties of their normal occupation or any occupation for which qualified, by reason of training, education or experience and not following any other occupation.
Own occupation definition of disability throughout claim
Yes
Any suited definition of disability
Totally unable by reason of illness or accidental injury to follow the material and substantial duties of their normal occupation or any occupation for which qualified by reason of training, education or experience and not following any other occupation.
Definition of disability linked to activities of daily living
Yes and is referred to as personal capability assessment. Where this applies, to be eligible for benefit the policyholder must not be undertaking any work and be consistently unable to perform at least three of the personal capabilities or suffer one of the serious conditions.
Deferred periods
Deferred periods of four weeks, eight weeks, 13 weeks, 26 weeks, 52 weeks, 56 weeks, 104 weeks and 112 weeks are available.
Number of occupation classes
Four
Claims support services
A helpline is available.
Health and wellbeing services
Access to Personal Health Manager
Number of exclusions applying to the plan
None
Analyst's comment
Income Protection Solutions is a traditional stand-alone proposition aimed at the intermediary market.
The plan is flexible, offering a choice of retirement ages from 50 to 70, eight different deferred periods and the choice of guaranteed or reviewable rates. Indexation in line with RPI is available and may be refused any number of times without losing the option to increase benefits in the future. There are no standard exclusions and the plan has one of the highest benefit levels in the market of £180,000 a year.
For a new product launch at a time when the IP market desperately needs revitalising, it is a pity that online submission and online underwriting could not have been employed to relieve IFAs of some of the more burdensome aspects. However, the plan competes in traditional Norwich Union territory with the emphasis on keen rates. The option to limit the benefit paying term to five years will further increase affordability for some clients.
Where NU Healthcare has something new to add is in the area of claims management. Claims are dealt with over the phone by a dedicated team of claims advisers and clients have access to Personal Health Manager, an online and telephone based health management tool including a 24-hour GP and stress helpline. This not only helps clients when they are ill but also helps prevent them becoming ill, a real move towards engaging with customers and providing a tangible benefit up front.
Ben Heffer, Principal Consultant, life and protection, Defaqto.
