Insurance Review: The hidden rewards of protection

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Protection policies that accompany mortgages often offer an extra range of free benefits, making them doubly worthwhile

A protection policy that sits alongside a mortgage is a vital part of financial planning.

But many people are unaware of the amount of free ‘added benefits’ that come with these policies. Here are a few examples to bear in mind.

Best Doctors: This independent service gives access to medical advice from a top expert if the client is diagnosed with a serious medical condition. There is no limit on the number of times the service can be used. Scottish Widows and AIG both offer access to Best Doctors at no additional cost.

Helping Hand: This is Royal London’s package of support services from third-party suppliers, which it offers via an independent care advisory service called RedArc. When a client makes a claim, RedArc assesses their needs and assigns them a nurse adviser to suit their situation. The nurse adviser finds out how they can help best, whether providing information on the client’s illness or simply being a good listener. They can also arrange a face-to-face second medical opinion, counselling, therapies, specialist equipment or a home visit.

Discount and rewards programme: Vitality offers benefits through its programme that rewards healthy living, including cinema, theatre and travel tickets. It also gives discounts on health screenings, stop-smoking sessions and some items of fitness equipment.

Free parent life cover: Aviva gives £15,000 of free life cover to new mums and dads. The cover lasts a year and can be taken out once the child is born and before they are four years old.

TIP OF THE MONTH

British Friendly has launched a death benefit for its income protection policies that is paid following the death of an insured policyholder.

The benefit is paid as a lump sum that amounts to six times the monthly IP payment.

The offer is extended to both new and existing IP customers regardless of initial policy terms.

The insurer is also making retrospective payments of the death benefit for members who died from 1 January 2016.

NEWS

Cavendish launches white-label service
Cavendish’s new white-label service is designed to provide intermediaries, including mortgage brokers, with a straightforward life insurance and protection solution for both execution-only and advised business. It will include the UnderwriteMe quote-and-buy system.

The service is intended to require minimal effort for both set-up and running.

Vitality boosts whole-of-life range
Vitality has enhanced its whole-of-life offering and updated some of its existing products.

Interest Rate Optimiser provides an upfront premium discount with annual increases dependent upon long-term interest rates, while Premium Optimiser provides an upfront premium discount with fixed annual increases of 2.5 per cent.

When combined with Vitality Optimiser and depending on the client’s age, policyholders can receive an upfront premium discount of up to 67 per cent.

Bereaved people’s benefits ‘need reform’
The work and pensions select committee reported that many bereavement benefits were paid only if couples had been married, which it deemed “particularly outdated” and said should be “addressed urgently”.

Its report also warned that the financial impact of bereavement often lasts for a significant length of time.

Exeter pays 94% of IP claims in 2015
The Exeter paid 94 per cent of income protection claims last year. Of the 6 per cent of claims that were declined, 2 per cent were due to the claimant still being able to work in their own occupation and 4 per cent were for non-disclosure.

Accidents, injuries and back and musculoskeletal problems comprised almost 60 per cent of paid claims.

Damian O’Connor is managing director at Roxburgh Financial Management