The aim of the contract is to pay a regular income to the insured while the insured person is experi...
The aim of the contract is to pay a regular income to the insured while the insured person is experiencing a loss of income due to incapacity. Two versions of Income Protection Cover are available; Primary and Comprehensive. The plan can be effected on a stand-alone basis, or in conjunction with other benefits under the PruProtect Plan.
The client completes a short application form (either in paper or online) and a representative of our underwriting team calls at a pre-arranged time to collect full medical information over the phone ('Big T' tele-underwriting). Further underwriting, if required, may include requests for MER/other specific tests.
The minimum premium for the plan is £10 per month.
Age at entry
The minimum age at entry is 16 attained and the maximum age at entry is 59 attained.
Minimum annual benefit
The minimum benefit is £250 per month or £3,000 per annum equivalent. This would require pre-disability earnings of £5,000 for Comprehensive Income Protection Cover.
Maximum annual benefit available
The maximum benefit for Comprehensive Income Protection Cover is £150,000 per annum (£12,500 per month). This would require pre-disability earnings of £294,000.
Minimum policy term
The minimum term available is 5 years.
Termination at age
The plan can terminate at any age up to age 70. It can be designed to cease exactly on the insured's 65th birthday.
Increase or decrease term, increase or decrease benefit and guaranteed insurability options available.
Plan can be used for keyperson protection. Professional expenses plan available. Executive cover plan available.
PruProtect policyholders can earn Vitality Points by engaging in a range of health and well-being related activities such as going to the gym, walking regularly, undergoing a free fitness assessment, attending a health screen, downloading healthy meal plans and either giving up smoking or declaring themselves a non-smoker. The majority of Vitality activities are free or available at PruProtect subsidised rates. Most points are gathered automatically from our Vitality partners or policyholders can easily submit them to us themselves.
PruProtect offer four reward statuses: Bronze, Silver, Gold and Platinum. The more points our members earn, the higher the status they achieve.
A policyholder's Vitality status at the end of each policy year will help determine whether their premium remains level (Bronze) or decreases, subject to the following percentages:
Vitality Status: Premium Change
Bronze: No change
Critical illness benefit available within policy
Critical illness cover is a separate benefit available within the menu.
Unemployment cover is available as an option under the PruProtect Plan. It is part of the additional benefits which are not attached to the plan account.
A career break option is available. The client can stop cover, resulting after three months in the individual being classed as a houseperson, with no reduction in the premium payable.
Terminal illness benefit available within the policy
Terminal illness cover is not available as a benefit with income protection.
Accidental death benefit cover available
Accident benefit is not available under this plan.
Replacement option available
A replacement option is not available.
Maximum % of income insurable
60% of the first £30,000 of the annual equivalent of Earnings/Pre-Incapacity Earnings and 50% of the annual equivalent of Earnings/Pre-Incapacity Earnings in excess of £30,000, subject to a maximum of £12,500 pm, (£150,000pa), equivalent to annual earnings of £294,000.
Benefit percentage limit based on total income
The benefits of the plan are based on the total income of the life assured. The client can choose for the income to be verified at outset, or at point of claim.
Standard definition of disability
There are three definitions of incapacity. The standard definition is based upon the client's own occupation.
The IPC benefit is paid after the insured has been continuously incapacitated due to illness or injury for a certain period of time after consulting with a registered medical practitioner. This is known as the deferred period and there is the following choice of deferred periods:
- seven days (for self-employed individuals only);
- one month;
- three months;
- six months; or
- 12 months.
Number of occupation classes
There are four occupation classes under the plan.
Claim notification period
The claim notification period varies, according to the selected deferred period. PruProtect must be notified of the incapacity two months before the end of the deferred period (two weeks for a deferred period of one month and immediately for a plan with a deferred period of seven days) from the date of incapacity.
Claims support services
Claims support services are offered, under the Recovery Benefit feature. The Recovery Benefit provides an amount of money that can be used by the Insured to pay for the cost of medical support, assisted care support or educational support. The Recovery Benefit becomes available after the insured has been continuously incapacitated for the deferred period. (At our discretion, we may choose to make this benefit available during the deferred period.)
The amount of the Recovery benefit is:
- For Primary IPC; the first monthly benefit amount at claim subject to a maximum of £1,000;
- For Comprehensive IPC; twice the first monthly benefit amount at claim subject to a maximum of £2,000.
Back to Work Benefit
This benefit is available on both the Primary and Comprehensive versions of the benefit. If the insured has been in receipt of the IPC benefit and returns to their own occupation such that the IPC benefit, Rehabilitation Benefit or Proportionate benefit is no longer paid, the insured will be entitled to the Back to Work Benefit.
For the Primary version this benefit will provide:
- At the end of the first month back at work, 25% of the last IPC benefit received prior to going back to work;
- At the end of the second month back at work, 10% of the last IPC benefit received prior to going back to work.
For the Comprehensive version this benefit will provide:
- At the end of the first month back at work, 50% of the last IPC benefit received prior to going back to work;
- At the end of the second month back at work, 25% of the last IPC benefit received prior to going back to work.
The Back to Work benefit is not available if a seven day or one month deferred period has been selected. Where the Planholder has selected a split deferred period and a seven day or one month deferred period has been selected for one of the deferred periods, but the second deferred period is not seven days or one month, then the Back to Work benefit will apply to the cover amount for the second deferred period only.
Health & wellbeing services
The roadtohealth service is available. At roadtohealth, your journey starts with a comprehensive health check and a tailored health programme. It is a unique approach aimed at motivating you to lead a healthier life, whatever your age or health. There are over 300 locations across the UK in pharmacies, health clubs and clinics, providing help at a local level. PruProtect members pay just £25 (Retail price £59.50). To make a booking, log on to the Member Zone at www.pruprotect.co.uk click on the roadtohealth link and book an appointment at your nearest clinic. Alternatively, contact PruProtect on 0845 601 0072, and a PruProtect Service Consultant will assist you in making a booking for a roadtohealth screen.
No general exclusions will apply to the Income Protection cover benefit. Specific exclusions may be applied for individuals who exhibit a high degree of risk (however, we would first consider loading the premium or lengthening the deferred period before applying the exclusion).
Living abroad excluded
IPC is available to all lives who permanently reside in the UK. If a life is permanently based outside the UK, we will cover the life provided they reside in one of the following countries: any country which is a member of the European Union; Australia; Canada; Channel Islands; Cyprus; Gibraltar; Iceland; Isle of Man; Malta; New Zealand; Norway; Switzerland; United States of America. If a life is permanently based outside the UK and not in a country listed above, no cover will be provided. For lives temporarily based outside the UK, the benefit payments will be paid for a maximum of 12 months.
The income protection element of the PruProtect proposition has been enhanced. Previously only available in conjunction with life critical illness cover, the plan can now offer IPC on a stand alone basis.
Primary and Comprehensive cover options offer generous benefit levels and the plan has many new and innovative features which further promote the theme of engagement running through the PruProtect plan.
The Vitality with Lite Rewards programme is extended to IPC whereby customers earning the required number of vitality points for adopting healthy lifestyle options can manage their premiums and even pay less for their cover.
The plan is flexible, offering a range of indexation and guaranteed insurability options and a wide ranging waiver benefit. Additional benefits include a permanent disability uplift benefit of 10% for those claimants that meet the activities of daily living test; housepersons get an additional dependent child allowance of £100 per child; and a recovery benefit provides an amount of money to purchase medical, assisted care or educational support to help aid claimants' recovery.
PruProtect has tried to make IPC as inclusive as possible. An 'Own' occupation definition is offered across the board. This, together with a welcome benefit for self-employed claimants, effectively granting a one day deferred period, throws down a challenge to Friendly Society plans and presents IFAs with a viable alternative for their clients.
Incorporating features like tele-underwriting to remove some of the burden from IFAs and a fresh approach to financial underwriting, which can now be carried out at inception, should give IFAs the confidence to sell more IP.
Ben Heffer, Principal consultant, life and protection, Defaqto.
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