Summary
The variety given by protection insurance menus and the companies who are leaders in this kind of insurance. A case study points out how the customer can gain
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Protection menus which provide customers the chance to pick ‘n mix life and health insurance cover in an all in policy have existed for over fifteen years. Alas the original versions did not appear to be very desirable to customers although the idea was right. Administrative savings, a single set of paperwork and direct debit were approved of by both the insurer and the consumer. On the other hand the benefits provided by these options were outweighed by the weaknesses.
The range of products given by the main pioneers, Standard Life, weren’t competitive. IFAs shopped around major providers to put together protective packages for the consumer, which notably undercut the rates found in protection menus. The industry has now progresses and a flood of new protection options have been presented which have secured the approvalof of most of the mediators.
Zurich Life was the first to introduce a winning formula when it re-launched it’s Self Assurance menu. They were soon followed by Legal and General, Liverpool Victoria Life, Friends Provident, Skandia Life, Scottish Equitable Protect and others are sure to shadow their lead before long.
Three fundamental details are found in the majority of protection menus. Critical illness insurance cover lists a number of stated critical illnesses for which it would settle a lump sum. The cheapest option, term assurance, pays out a lump sum if you pass away within a limited period and nothing from then on. The final one is income protection insurance, which offers a consistent income if illness or long term disability stops you from working. The options may give you redundancy cover, which is generally restricted to one or two years and might also be restricted to the pay out of a mortgage. The main value is the flexibility of the products. For instance various levels of insurance can be organised for independent sections, so should you make a claim on 1 part the others will still continue. No supplementary medical evidence will be necessary prior to major life style events, like having a baby, getting married or moving house. These added benefits are called ‘Guaranteed Insurability Options’.
Different elements of insurance may be included following the close of a short questionnaire and you will still get benefit from the normal insurance policy discounts.
An instance of the benefits derived from a protection menu is illustrated by a newley married couple who decided on Aviva’s Protection Choices menu for mortgage protection. They are paying a combined premium of 31 pounds and 40 pence a month for separate critical illnesses and life policies, which have been written on a joint life basis. At the start they have insurance of £109,500 which reduces as their 22 year mortgage is paid off. Life insurance cover will be paid out if 1 of them departs this life and the insurance policy is terminated, but the survivor will still benefit from critical illness cover Life assurance will be maintained for both of themeven if one of them becomes ill and the policy will pay out on whoever dies first.
If the husband and wife had purchased a standard joint life assurance policy with Co-op Insurance they will only receive a pay out on their 1st claim. While with their Protection Choices policy they are provided with 2 possible pay outs costing only £7.00 more. Even if employees are sometimes offered income protection at work they can also insure their home loan in a similar way. As an extra they may want to take out extra critical illnesscover and life insurance not tied to their mortgage. Standard Life’s protection menu permits them to do this in a straightforward and cost effective way. The new menu based insurance products enable you to save pounds even though you can research around for single policies and only save a couple of pence.