Insurance Industry Relies On Pick And Mix

Summary
The flexibility provided by protection leading providers to produce protective packages for the clients, which significantly reduced the prices found in protection menus. The insurance companies have now advanced and a mass of new protection menus have been presented which have secured the support of many intermediaries.

Aviva was the 1st to work out a winning procedure when it re-launched it’s Self Assurance menu. They were soon followed by Friends Provient, Legal and General, Liverpool Victoria Life, Scottish Equitable Protect, Skandia Life and others are likely to shadow their lead before long.

Three essential features are found in most protection menus. Critical illness insurance cover names a number of stated critical conditions for which the insurance companies will settle a lump sum. The least expensive option, term assurance, pays out a lump sum if you pass away within a given period of time and nothing from then on. Lastly there is income protection, which gives you a consistent income if long term disability or illness thwarts you from working. The menu may offer you redundancy protection, which is often restricted to 1 or 2 years and may also be limited to the payment of a mortgage. The chief value is the flexibility of the policies. For example various levels of cover can be arranged for independent modules, so should you make a claim on 1 part the others will still continue. No further health evidence will be needed prior to major life style events, like becoming married,having a baby, or moving house. These added benefits are known as ‘Guaranteed Insurability Options’.

Different components of cover may be added on after the conclusion of a short questionnaire and you are still able benefit from the typical insurance policy discounts.

An example of the benefits sourced from a protection option is illustrated by a young couple who chose Standard Life’s Protection Choices option for mortgage protection insurance. They are paying a combined premium of 31 pounds and 40 pence a month for separate critical illnesses and life policies, which have been written on a combined life basis. At the start they have insurance cover of £109,250 which goes down as their 21 year homeowner loan is paid off. Life insurance would be paid out if 1 of them departs this life and the insurance policy is terminated, but the survivor will still be covered for critical illness insurance Life cover will be maintained for both of themeven if one of them becomes ill and the policy will settle on first to die.

If the husband and wife had signed up for a standard joint life insurance policy with Scottish Equitable they would only get a pay out on their 1st claim. But with their Protection Choices insurance policy they are provided with two possible pay outs costing only £7.00 more. Even though employees are sometimes provided with income protection with their job they may also wish to insure their mortgage in the same way. Also they could want to take out further critical illness cover and life cover not tied to their mortgage. Standard Life’s protection options allows them to do this in a cost effective and straightforward way. The new features based insurance policies allow you to save money even though you can shop around for individual insurance policies and only save a few pence.

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