Aviva will now only offer own occupation definition on income protection policies
The Angry Policyholder campaign against useless task based definitions took a giant leap forward today. Aviva, one of the UK’s biggest provider of protection insurance products has agreed to now only sell own occupation policies.
Aviva announced in March 2012, following a comprehensive and wide-ranging review of occupational classes within the industry that thanks to better levels of risk and improvements in workplace health and safety that it would write 95% of new IP policies on the own occupation definition. Aviva’s decision to underwrite all individual income protection (IP) policies on an own occupation basis, will simplify income protection cover and ensure more claims are paid.
Further good news for policyholders comes in the form of a guarantee that the own occupation terms will remain throughout the life of the policy and all claims will be paid on this basis for the full duration of the claim. This is great news as with other insurers policies can revert to a lesser definition after one or two years meaning policyholders can see claims being stopped.
The changes will be applied to all new individual IP policies from 21 October 2013, including part-time cases where the customer works fewer than 16 hours a week. Part-time roles of fewer than 16 hours a week are treated differently to full-time jobs by many insurers, so this move is understood to be a first for the industry.
The move builds on Aviva’s previous position of writing 95% of policies on an own occupation basis. The latest enhancements are designed to further improve the insurer’s already strong payment record of 93.5% of individual income protection claims.
Around 90 job types will be newly underwritten under own occupation terms as a result of the changes. The majority of these occupations are driving roles, but also include specific teaching professions such as PE teacher and music teacher, as well as postal delivery people (see below).
Craig Colton, protection managing director for Aviva says: “We’re committed to paying as many claims as possible, so we have decided to make income protection simple and straightforward for all our customers.
With just one definition for all the occupations we cover, anyone who is incapacitated and cannot do the duties of their occupation can be confident they will have a successful claim – regardless of what they do and how many hours they work.
“Income protection is one of the most useful types of insurance on the market, given that it can provide a regular income right up to retirement. Our average payment term for IP customers is more than nine years, so it’s clear to see the benefits it affords. We have an excellent claims payment record at Aviva and by moving to 100% own occupation terms we fully expect to help even more customers if they are unable to work in the future.”
The top 10 jobs which will now be covered as own occupation are:
- HGV Driver
- Taxi Driver
- Delivery Driver
- Driving Instructor
- Bus Driver
- PE Teacher
- Paramedic (Driver)
- Music Teacher
- Fitness Instructor
If I had a complaint I would raise the question as to why Aviva has not offered current policyholders who are paying for a work task (ADL or ADW) policy the option to now upgrade to own occupation. It will also be interesting over the next few years if Aviva see an increase in the number of claims it pays out on income protection.