Following angrypolicyholders.com campaign against ‘task based’ definitions in protection insurance, LV= confirms they will only offer 100% OWN OCCUPATION
LV= became yet another insurer to support our campaign to offer all policyholders the superior own occupation definition when purchasing income protection.
We have argued since 2010, that the only definition worth having is own occupation. The definition means if you are unable to do your job, specifically your own occupation, your claim will be paid unless you have failed to disclose a previous condition. On the other-hand if your insurer has sold you a policy with a work task definition then the chances of a payout are very slim at best.
LV=’s announcement today that it is now to only offer policyholders own occupation definitions in income protection cover can only be good for consumers. As one of UK’s biggest protection insurance providers today’s decision will put pressure on other insurers to follow suit. LV= said it has now stopped offering the work tasks definition of incapacity in order to simplify cover and make it easier for customers to understand and claim on.
The changes will apply to all new income protection policies from the 24th March 2014 and will see 325 occupations move from tasks definitions to own occupation cover. In addition, LV=has also increased the number of jobs for which it will provide income protection to by 225.
A concern with insurers offering own occupation cover to more occupation is that the policy will revert to a lesser definition after one or two years. LV= has confirmed the own occupation definition in its policies from today will apply for the lifetime of the policy, and for the length of any claim. As well as widening the number of occupations that qualify for own occupation cover, LV= has simplified and improved cover for homemakers.
If someone takes out homemaker cover they will now be able to make a claim against their policy if they are either unable to prepare a meal or do basic housework. The level of cover a homemaker can take out has also increased from £1,250 a month to £1,500. LV= has enhanced the cover that they offer customers who become unemployed after their policy starts or take a career break. Now, as long as they continue to pay their premiums, customers will keep own occupation cover for the first year and throughout any claim made during this time. After twelve months, they will be offered homemaker cover.
With people working longer, retirement ages increasing, including the age you can claim a state pension it is good to see this being taken into account by LV=. The insurer has also increased the maximum age for income protection to 70 years old across all occupations, as previously maximum ages were lower for roles such as teachers.
Martin Sincup, LV= Income Protection Manager said: “We believe that products that protect an individual’s income should be the cornerstone of any sound financial plan. We have decided to solely provide own occupation income protection cover as it is the best definition.”
Mr Sincup continued: “Moving to own occupation cover makes it simpler for both customers to understand when we will pay out and makes it easier for customers to claim on.”
“Whether someone is single, in a relationship or has a family, if they are unable to work and earn an income most wouldn’t be able to make ends meet for long. The changes we have made to our policy mean that a greater number of people will have access to extremely valuable cover that will pay out if they are unable to work for a long period of time due to accident or sickness.”