Employees have been offered ‘unprecedented’ levels of income protection cover during the Covid-19 pandemic, we can reveal.
Insurance companies have shown unseen levels of flex throughout the crisis, updating their terms for those with existing accident and sickness policies and introducing payment holidays and premium breaks. Many providers are also accepting new applicants, including those on furlough.
The UK Government’s furlough scheme, aimed at helping businesses pay millions of employees unable to work due to the Coronavirus outbreak, attracted more than 140,000 applications on its first day of operation in April. At the same time, income protection providers are looking after new and existing customers as increasing numbers of workers look towards IP for the future.
ActiveQuote head of partnerships Rod Jones said: “We have found that the current situation is seeing more people than ever turn their attention to the benefits of having income protection in place, regardless of their employment status.
“We are pleased to say that providers have responded to this long-awaited uptake in interest by flexing their terms in support of existing policyholders, as well as encouraging those who have already seen their employment status compromised to consider the benefits having cover in place can bring in future too.
“Some providers already had existing career break options available in their policies, but have now modified the criteria of this option to assist in the current climate. The situation really is unprecedented in terms of amending acceptance criteria across the board.”
Since the Coronavirus outbreak has taken hold in the UK, our partners Aegon and AIG will accept new applications based on the applicant’s full salary. Aviva is accepting new applications based on the applicant’s occupation, working hours and annual earnings as of March 1 2020, and 80% of salary will be paid if the policyholder is incapacitated while in receipt of reduced earnings.
Royal London and Vitality’s cover is based on full salary, while Shepherds Friendly is basing cover on 80% of a salary claimed while on furlough. LV is offering a payment holiday for vulnerable customers - those who have been subject to a recent and significant reduction in salary - and Holloway has introduced a three-month premium option to put policies on hold with no claims for customers who have paid at least three months’ premiums and are not in arrears.
There are four main types of income protection insurance – mortgage cover, redundancy protection, loan protection and accident and sickness cover. They are available as individual policies or as a package, depending on your personal circumstances. All types of income protection are designed to cover a range of general living costs in the event of the policyholder being unable to work through no fault of their own.
We’ve witnessed a spike in the number of income protection enquiries due to Coronavirus, as well as increased contact from existing customers concerned about the level of cover they already have in place. To find the right cover for you at this difficult time, compare income protection quotes on our website.
