1 For UK financial advisers only Income protection solutions Tailored to your client and their budget
2 What is income protection? Income Protection can be an everyday essential that works when your client can t. Although the concept is simple, we understand your clients and their needs are all different. Through our flexible range of income protection products, we ll help you tailor a solution unique to your client; taking into account their occupation, budget and whether or not they re looking for additional unemployment cover. Contents 2 3 Income Protection as unique as your client 4 Quality features as standard 5 Quick guide: Income Protection 6 Quick guide: Personal Sick Pay 7 Quick guide: our budget versions 8 Quick guide: Income Protection with unemployment cover 9 Making it easier for you 10 Member benefits 11 LV= Income Protection product comparison
3 Income Protection as unique as your client At LV= we believe everyone should be supported if they re ill and can t work, through quality financial protection which pays out when it matters. Through our range of Income Protection products, which all include an own occupation definition of sickness, you can tailor your client s protection to suit their needs and budget. Five own occupation products Income Protection (part of the Flexible Protection Plan) This is our traditional income protection for clients in lower risk jobs, such as office workers, or those in professional occupations (such as accountants). We ll only ever use an own occupation definition of sickness if your client was working before they fell ill regardless of how long they claim for. And the insurance will keep paying out until your client can return to work no matter how long it takes. Personal Sick Pay (part of the Flexible Protection Plan) Personal Sick Pay is our specialist income protection aimed at clients in riskier jobs who can be more expensive to insure, such as nurses, teachers, electricians and builders. It may also be suitable for clients who find it difficult to prove how much they earn, such as the self-employed or contract workers as they can benefit from our Personal Sick Pay guarantee. Like our traditional Income Protection, it will keep paying out until your client can go back to work. Budget Income Protection & Budget Personal Sick Pay (both part of the Flexible Protection Plan) These products are exactly the same as our full policies with just one difference: we ll pay your client for a maximum of 24 months for any claim. But the good news is, your client will be able to make as many claims as they need to, even for the same illness or injury, providing they ve been back at work for at least six months between claims. Both budget products can be a great solution for price sensitive clients, as the cost of cover is significantly reduced. Income Protection with unemployment cover - Mortgage & Lifestyle Protection (standalone product) This is our income protection with the option to add unemployment cover. It s quick and easy to apply for Mortgage & Lifestyle Protection as each case is tele-interviewed, with an ultra-short online application process. At LV= we like to keep things simple, so the above definitions help explain the main differences between our Income Protection products. For full details and a comprehensive breakdown turn to page 11. What is own occupation cover? Own occupation is regarded as the fairest and easiest definition of sickness to claim on, as your client is covered if they can t do their own job. Providers who offer work-task cover will only pay out if your client is unable to perform a number of set tasks, for example, walking a certain distance or writing unaided. This type of definition of sickness can be difficult to claim on and is less likely to pay out compared to own occupation cover. Income protection solutions Tailored to your client and their budget 3
4 Quality features as standard Although our Income Protection products can be tailored to meet your client s specific needs, we do offer a number of features as standard. Own occupation cover for all jobs Change of occupation We believe paying your client if they re too ill to do their own job is the fairest form of cover, which is why we won t offer anything less. This is the only definition we ever use (unless your client is a homemaker or hasn t been working for more than 12 months when making a claim). Unlike some other providers we won t change this during a claim, making it really easy for you to recommend LV=. We guarantee never to increase the cost of your client s cover if they change jobs even if it s to a riskier occupation, or to one of the few jobs we decline at application. If your client claims, we ll base it on the job they have at that time. And if their occupation risk improves, we may even be able to reduce what they pay. Cover to age 70 We don t have any age restrictions on any of the occupations we insure. No deductions if your client receives state benefits We don t think it s fair to reduce what we pay your client if they receive state benefits. So we won t. It also makes it easier for you to work out what they ll get. Fantastic member benefits For us, protection is more than just paying a claim. Once your client takes out one of our Income Protection products, they ll become a member of LV=. As a member, they ll be entitled to a range of benefits as soon as their plan starts. These include free and unlimited access to a confidential member helpline, offering expert advice on healthcare support and counselling, as well as legal and financial assistance. For more information on member benefits turn to page 10. No standard exclusions As you d expect from LV=, we have no standard exclusions, so your client won t have any surprises when they come to claim. Optional waiver of premium Your client doesn t have to worry about paying their premiums while we re paying a claim they can just concentrate on getting better, or finding a new job. 4
5 Quick guide: Income Protection 1,500 benefit guarantee We understand your client s income can fluctuate, especially if they re self-employed; their income relies heavily on commission and bonuses, or if they move to a lower paid job. At LV=, we don t like the idea of your clients not getting what they pay for, which is why our Income Protection plan automatically includes a 1,500 benefit guarantee. If your client needs to make a claim, they ll receive at least 1,500 a month, tax-free, guaranteed (or the amount of cover they chose to insure if less). The aim of this guarantee is to protect your client against a genuine drop in income after they take out their policy. Back to work support We want to help your clients get back to work sooner, helping improve their wellbeing and morale. So if we re paying a claim, your client could be eligible for rehabilitation support and advice. This could include things like physio and counselling, helping prepare them for their return to work. But please note, this may be capped to the equivalent value of one month s benefit. Own occupation cover when unemployed or on a career break If your client becomes unemployed or takes a career break, we ll still give them own occupation cover during the first year they re off, and base their earnings on the last 12 months they were in work. After a year your client will benefit from our improved homemaker definition, and we ll pay their claim if they can t prepare a meal or do basic housework. For clients who are homeowners, and those who haven t worked for more than a year, we ll limit the cover to a maximum of 1,500 a month. Generous salary limits Your clients can cover up to 55% of their income (before tax), or up to 55% of net profit if they re self-employed. For clients who own a limited company their income can also include dividend payments, providing these are clearly related to their business activities and are paid from current year profits. We ll review three years of income for your self-employed clients When working out the maximum benefit we can pay self-employed clients, we ll take into account the last three years of their income. Guaranteed or inflation-linked premiums Your client can guarantee their premiums, meaning we ll never increase the cost of their cover. But if they want their Income Protection to keep up with the cost of living, they can choose inflation-linked cover. We simply increase the cost and how much we d pay them by the rate of inflation each year, using the Retail Prices Index. Most other providers increase the price at a higher rate than the benefit, leading to steeper premiums as your client gets older. Don t forget that if your client chooses level cover, the price is fixed (from when their policy starts) and doesn t change. This means it won t keep up with inflation, and will buy less in the future. Income protection solutions Tailored to your client and their budget 5
6 Quick guide: Personal Sick Pay Personal Sick Pay is our specialist Income Protection aimed at clients in riskier jobs who can be more expensive to insure, such as tradespeople, nurses, teachers, and construction workers. It can also be recommended to clients who find it difficult to prove how much they earn, such as the selfemployed or contract workers. And the price is the same regardless of your client s occupation, whether or not they smoke and how many miles they drive for work. Has an own occupation definition of sickness Can include inflation-linked future prices Back to work support We ll review three years income for self-employed clients The Personal Sick Pay 1,000 guarantee Advisers have told us it s harder to insure clients who can t provide evidence of earnings, for example, startup businesses, the self-employed or clients in more transitional jobs. So we ve included the Personal Sick Pay 1,000 guarantee, where your client can have up to 1,000 a month cover, providing they normally work 30 hours a week. And when they claim, we won t make any deductions if they receive employer sick pay or any other insurance. For clients wanting more than 1,000 a month, or those working less than 30 hours a week can protect up to 60% of their earnings before tax. If they claim in the future and their earnings have dropped, we ll pay them 60% of their new level of earnings (less any employer sick pay and payments from other insurance). But if your client does normally work at least 30 hours a week, we ll still guarantee to pay then at least 1,000 a month - no matter what their earnings have dropped to. And we won t deduct employer sick pay or other insurance. Generous salary limits Your clients can cover up to 60% of their current earned income (before tax), or up to 60% of net profit if they re self-employed. And just like our traditional Income Protection, we ll include dividend payments for clients who own a limited company (so long as these are clearly related to business activities and are paid from current year profits). How we ll pay the claim If your client claims they can choose for their benefit to be paid either weekly or monthly, helping them budget in the way they re used to. Day one option Personal Sick Pay includes the option for your client to choose back to day one cover. If they choose this waiting period, we ll pay them from the first day they stopped working (but they ll need to be off work for three days in a row before they can claim). This option is a useful feature for clients like the self-employed who don t get employer sick pay, or those without an adequate financial safety net. Your client will also be able to choose from 1, 4, 8, 13, 26 or 52 week options. Choice of guaranteed or reviewable future prices Personal Sick Pay increases in price as clients get older, as the risk of ill health increases with age. But unlike some other specialist income protection providers, you can choose for your client s future prices to be guaranteed or reviewable. If your client chooses guaranteed prices, they ll know in advance how much their insurance will normally go up to each year. But if they decide on the reviewable option, we can review the future costs, but we ll only do this every five years (we won t review them every year like some other providers). It s worth remembering that although reviewable prices will initially be the cheaper option, that might change in the future. Menu plan Personal Sick Pay is part of the LV= Flexible Protection Plan, allowing you to tailor protection specific to your client s needs, circumstances and budget. We re the only provider to include specialist income protection in our menu plan, which also includes Critical Illness cover and Life insurance. 6
7 Quick guide: Our budget versions If your client s on a budget, they can still benefit from quality LV= Income Protection, which costs significantly less than the price of full cover. We ll pay any one claim for a maximum of 24 months, but the great news is your client can make as many claims as they need to - even for the same condition, providing they ve been back at work for at least six months between claims. Example price difference* Income Protection Example premiums (initial monthly cost) Income Protection Budget Income Protection Saving Age 34, non-smoker, 6 month waiting period, guaranteed rates, 1,000 benefit a month, inflation-linked, expiry age 65 Age 28, non-smoker, 12 month waiting period, guaranteed rates, 1,000 benefit a month, inflation-linked, expiry age % % * Correct as at December 2014 Personal Sick Pay Example cost* Personal Sick Pay Budget Personal Sick Pay Saving Age 28, nurse, one week waiting period, guaranteed premium rates, 1,000 a month benefit, expiry age 65 Age 45, taxi driver, four week waiting period, guaranteed premium rates, 1,000 a month benefit, expiry age at age at age 28 26% at age at age 45 57% * Correct as at December The costs illustrated here are the initial monthly costs - and will go up over the term of the policy as the client gets older. They are also based on our standard rates (if we have agreed special rates with your agency you ll need to contact us for the appropriate prices). Even more ways to reduce the cost To reduce the cost of cover further, you could consider making changes to the following features. It might not always be ideal, but as some cover is better than none, it s definitely worth looking at. Waiting periods If your client can extend their waiting period the cost of their policy will be reduced. It s worth remembering different waiting periods can be chosen with our Budget Personal Sick Pay, so your client won t be stuck with a four week waiting period (unlike other specialist income protection providers). Reduce cover or suggest an earlier end date You could discuss with your client reducing their monthly benefit to make it more affordable. Or you could recommend an earlier end date, as the older you are when the policy is due to end, generally, the higher the price will be, as the risk of ill health increases as you get older. It s worth remembering if your client s insurance did end earlier they might not be able to get replacement cover at a later date. Income protection solutions Tailored to your client and their budget 7
8 Quick guide: Income Protection with unemployment cover (Mortgage & Lifestyle Protection) You can also protect your clients against ill health and unemployment with our total income replacement solution; Mortgage & Lifestyle Protection. We ve included many of the features from our standard Income Protection, as well as number of special enhancements. Unemployment protection If your client chooses to include unemployment cover and is made redundant, we ll pay them for up to 12 months for any single claim (and up to 36 months in total over the life of the plan), giving them the time and breathing space they need to find the job that s right for them. Cover as unique as your client Mortgage & Lifestyle Protection can protect both mortgage (or rental) payments, in addition to living expenses. And for added flexibility, two different policies can be set up for each client. For example, the mortgage cover could run alongside the life of the mortgage, with living expenses protection running up until retirement. 8 Mortgage guarantee This feature s been designed to help your self-employed clients, those whose income relies heavily on commission and bonuses, or clients who ve moved to a lower paid job. If your client needs to claim and can t provide proof of earnings that support their level of cover, we ll use their average regular monthly mortgage payments over the previous 12 months. This is just one of the ways we make sure your clients get the money they were expecting and need. Guaranteed price even for the unemployment cover Sell alongside a mortgage If your client takes out Mortgage & Lifestyle Protection, we promise never to increase the cost of their cover even if they ve made a claim. There s also the option to inflation-link living expenses, helping your clients keep up with the cost of living. In this case (and just like our other Income Protection products), we ll simply increase the premium and cover each year in line with the Retail Prices Index. Mortgage & Lifestyle Protection is a long-term contract, so the point of sale prohibition rules for ASU (accident, sickness and unemployment) and MPPI (mortgage payment protection insurance) products don t apply. This means it can be purchased at the same time as a mortgage - presenting a great upselling opportunity for you. Plus, with an ultra-short application, it only takes a few minutes to submit a case saving you valuable time.
9 Making it easier for you We know recommending Income Protection isn t always easy, so we re here to support you in making a successful sale. In addition to all the sales aids and tools you ll find at LV.com/adviser, we ll make it easier for you to make the sale in the following ways: Specialist support when you need it We offer pre-sales and underwriting support, meaning right at the start of the sales process you can clarify any questions you or your client may have. This can significantly speed up the application and ensure your client is covered quickly. You ll have direct access to our team (and a dedicated account manager) by phone and by . We don t usually need a GP report Although we have medical limits, there are no automatic requirements for GP reports at LV=. In fact, a full GP report is needed for less than 5% of our standard Income Protection applications, helping you protect your clients faster. Tele-interviewing We offer a full tele-interviewing service to help you complete the application process faster, benefiting both you and your client. Another great advantage of tele-interviewing means we re responsible for getting disclosure from your client, removing the burden from you as an adviser. One of our UK-based team will call your client at a time convenient to them, and we ll stay in contact with you throughout the entire process. Tele-interviewing is available with all our Income Protection products. Doctors and surgeons We also offer income protection for doctors and surgeons, which includes a number of special features for medical professionals. Large case team All cases you send to us are important, but we understand some applications require specialist support. So we ll offer you a dedicated team for larger cases ( 5,000 a month cover or more), which includes designated administrators and senior underwriters, who will deal with your case from pre-submission to policy completion. The team will contact you at every stage of the application making it easier for you as you ll know exactly what s going on. And the team will go that extra mile to make sure your client gets the cover they need, as quickly as possible. For example, if your client needs to see a medical professional but can t take time off work to visit their usual GP, we could send a nurse to visit them at home. We ve developed a number of interactive tools to help you show the need for Income Protection: The Risk Reality Calculator - the only tool in the market demonstrating to your clients the real risk of them being unable to work for two months or more; suffering a serious illness and even dying. The results can be a real eye opener. Income Shortfall Calculator - help show your clients the real income shortfall they could expect if they weren t able to work because of illness or redundancy. A handy graph will help visualise the big income gap they could experience if they didn t have the right protection in place. To access the full range of tools available, including sales flyers and easy-to-understand client brochures, visit LV.com/adviser Income protection solutions Tailored to your client and their budget 9
10 Member benefits Our Member Care Line and more For us protection is more than just paying a claim. So we ll offer your client a range of exclusive member benefits, including free and expert support services, generous discounts on LV= general insurance and access to funding. Member Care Line Exclusive to members, the LV= Member Care Line is available 24 hours a day, 7 days a week and can offer free expert advice on health and wellbeing, counselling and legal advice. This help could prove invaluable if your client needs to make a claim, however the Member Care Line can be used as soon as your client s policy starts, with no limit on how many times they use it. Discounts on other LV= products All members are eligible to receive generous discounts on our general insurance, including car, pet and home insurance. Member Support Fund Once your client s been a member with us for a year, they ll be able to request financial assistance if they or a family member are struggling to make ends meet. Since 2001, we ve helped hundreds of members by offering grants as we understand sometimes people do fall on hard times through no fault of their own. And the great thing about the fund is it s managed by a small independent committee of LV= members, who look at each individual request and decide whether a grant can be awarded. 10 Member Care Line focus Health and wellbeing - Your client will have round the clock access to a team of doctors and nurses, who can offer practical help on anything they re worried about. And if your client is sick or injured, the doctors and nurses will be able to tell them exactly what to expect. Your client will also be able to phone the helpline if they re worried about new symptoms, whether it s for themselves, their children or other members of their family. Counselling - Paying for private counselling can be very expensive, and waiting lists on the NHS can be long. But with the Member Care Line, your client (and their family) will be able to speak to a qualified counsellor at a time convenient to them. The trained specialists will listen to your client and advise them on how to cope with things like relationship difficulties, bereavement, and stress. In fact; your client will be able to speak to a trained counsellor about anything they re worried about. Legal advice - The legal world can often seem daunting and confusing, not to mention expensive if your client needs to speak to a solicitor. But with the Member Care Line, your client will be able to speak to our team of fully qualified solicitors and legal executives, without the associated costs. The team will be able to advise your client on a range of legal matters, including general law, property-related issues, as well as employment and family legislation. Our Member Care Line could be particularly beneficial to any of your self-employed clients who don t benefit from similar schemes sometimes offered by employers.
11 LV= Income Protection product comparison: Feature Overview Accident & sickness cover Income Protection and Budget Income Protection Income Protection for clients in lower risk occupations looking for accident and sickness cover Long-term (Income Protection) 24 months for any single claim (Budget Income Protection) Personal Sick Pay and Budget Personal Sick Pay Specialist income protection for clients in higher risk occupations looking for accident and sickness cover/clients looking for back to day one cover Long-term (Personal Sick Pay) 24 months for any single claim (Budget Personal Sick Pay) Income Protection with unemployment cover (Mortgage & Lifestyle Protection) Clients looking for accident and sickness cover, with the option of unemployment protection Long-term Unemployment cover x x 12 months for any one claim (36 months in total) Definition of sickness Own occupation (all occupations) Own occupation (all occupations) Own occupation (all occupations) Own occupation for whole of claim Benefit guarantee (monthly) Number of occupational rates classes Cover for homemakers/carers at outset 1,500 (linked to earnings and client must work at least 16 hours a week if selfemployed/25 hours if employed) 1,000 (not linked to earnings but client must work at least 30 hours a week) Various 1 Various x x Pricing structure Guaranteed or reviewable Guaranteed or reviewable and age-related (price goes up with age) Mortgage guarantee (max 1,500, based on average of 12 months mortgage payments) Guaranteed How claim is paid Monthly Weekly or monthly Monthly Deferred (waiting) periods 1, 2, 3, 6, 12 or 24 month options Day 1 (back to day one) and 1, 4, 8, 13, 26 or 52 week options 1, 2, 3 or 6 month options Level/inflation-linked cover Level or inflation-linked Level or inflation-linked Level (mortgage payment protection) Level or inflation-linked (living expenses protection only) Smoker / non-smoker rates separate rates for smokers and non-smokers x same rate regardless of smoker status Business mileage loadings x separate rates for smokers and non-smokers Max age at expiry (state retirement for unemployment) Max age at entry Min age at entry Max monthly benefit 12,500 8,333 4,166 Income limits Up to 55% Up to 60% Up to 50% Career break own occupation one year one year x if not working an activities of daily living definition of sickness. Cover capped at 1,500 a month Free member helpline No deductions if client receives state benefits No standard exclusions Specialist rehabilitation support (accident and sickness only) Proportionate benefit (accident and sickness only) No automatic requirement for GP reports Waiver of premium optional optional automatic Guaranteed Increase Options (GIOs) x Special features for doctors and surgeons Part of the LV= Flexible Protection Plan 3,000 benefit guarantee Sabbatical break cover NHS sick pay guarantee x x Application Online, paper, tele-interview Online, paper, tele-interview Tele-interview only Quote at Iress, Webline, Assureweb (ipipeline), True Potential,Lifequote lv.com/adviser Iress, Webline, Assureweb (ipipeline), lv.com/adviser x lvmlp.co.uk Income protection solutions Tailored to your client and their budget 11
12 Liverpool Victoria Friendly Society Limited: County Gates, Bournemouth BH1 2NF. LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Friendly Society Limited (LVFS) and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. LVFS is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number Registered address: County Gates,Bournemouth BH1 2NF. Telephone: /15