Protection specialist LV= is launching ‘Sick Pay Insurance', a simplified income protection product, the first of its kind on the market.
Sick Pay Insurance is designed for people aged between 17 and 45 who want to protect themselves financially against being unable to work due to sickness, or an accident. People are able to buy comprehensive cover, accompanied by short and simple literature with no medical questioning. Apart from five occupations, everyone can be covered against not being able to do their ‘own' job - the most comprehensive definition available. The cost of cover is the same for everyone, and the amount of cover people can take out is based on the number of hours they work.
People can be confident that when they claim they will receive the cover they have paid for, as no existing sick pay, insurance pay-outs, or any state benefits are taken into account. Therefore, a claim would never be reduced by LV= because someone is over-insured, as long as they were still working at least the number of hours their cover was based on.
Customers can choose a fixed amount of cover between £500 and £1000 per month, and Sick Pay Insurance can be set up online within a few minutes. Once someone has been unable to work for four weeks, Sick Pay Insurance can pay out for up to a total of 12 months, and multiple claims can be made, even for the same condition. Apart from medical conditions the customer has suffered in the last two years, there aren't any types of accident or sickness that won't be paid out for. Cover automatically runs until age 70, and premiums are guaranteed for the first five years. LV= cannot cancel the policy or change the terms or conditions of the cover in place at any time.
Sick Pay Insurance is aimed at those who do not traditionally seek financial advice, and are therefore unlikely to take out income protection.
Mark Jones, LV= Head of Protection, said: "There is a huge gap in the number of people who have their income protected, when it is amongst the most important and relevant thing for people to insure.
"Sick pay Insurance is a quality simple product where people can be sure that they will receive the benefit they pay for if they need to make a claim. Whether someone is single, in a relationship or has a family, if they are unable to work and earn an income most people wouldn't be able to make ends meet for long. We insure our pets, home and even our mobile phones, but not the one thing that pays for everything else, our income. We are trying to raise awareness of the importance of people protecting their income, while giving them a very simple way of doing so."
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