250 occupational classes have been updated enabling more policyholders to obtain own occupation income protection cover
Aviva has confirmed that it is to write 95% of income protection polices using the own occupation definition. The insurer actually mentioned this decision on the BBC consumer program, Rip Off Britain, following our appearance on the show highlighting the useless work task definition.
Following a comprehensive and wide-ranging reviews of occupational classes within the industry, around 250 occupational classes have been updated so that they better reflect today’s level of risk and improvements in workplace health and safety. For policyholders, the changes will lead to lower premiums and an increase in the breadth of cover, with the definition of incapacity less strict than it has been to date.
Many occupations previously classed as a higher risk, (e.g. journalists, chartered surveyors, vets and scientific professionals), have now been reduced, with 221 occupations seeing a reduction in class, and therefore premiums, as a result of the review. Additionally, a further 21 occupational classes that had previously been declined are now covered, including roofers, tilers and scaffolders.
Around 95% of occupations will now also be underwritten on an ‘own occupation’ basis, rather than a ‘suited occupation’ basis or on terms where policyholders need to satisfy an activities of daily work (ADW) clause to realise a claim. As a result, the definition of incapacity will be less severe, and the benefits fairer and much clearer for policyholders.
Aviva has also raised many of the non-medical limits on its Income Protection Solutions cover. Now, policyholders across all age ranges will receive a higher level of automatic cover without the need for a nurse screening examination or full medical examination, regardless of disclosure. The move complements last year’s increase of non-medical limits for Aviva’s life and critical illness cover and will improve processing and claim time for many people.
Additionally, there is no longer a requirement for automatic financial evidence, which has traditionally been required for high levels of income protection cover.
Jon Parker, chief medical underwriter, Aviva, UK Health, said: “With the proposed reform of the welfare state it’s now more important than ever for people to adequately protect themselves against the loss of an income through illness or injury. At Aviva, we are committed to making sure that income protection is affordable and accessible for as many people as possible.
“We have rigorously challenged the market’s classification of occupations and industries at certain prices and the particular definitions of incapacity, as the risks once associated with many occupations are no longer as high thanks to advances in technology and better workplace health and safety. As a result, we have significantly improved our terms and premiums for customers in line with the risk their occupations bring today, not 20 or 30 years ago. We’re also pleased that the great majority of occupations will now be accepted on an ‘own occupation’ basis, enabling customers who are unable to do their job through illness or injury to more readily and swiftly access the benefits and rehabilitation support they need.”
Aviva have also confirmed that all new policies that are underwritten and accepted on an ‘own occupation’ basis will be assessed against the same own occupation definition throughout the entire period of any claim. Aviva will not switch the definition to an ADW or “suited” basis during a claim.
The new underwriting terms will come into effect by 20 March 2012.