The UK-based insurer, LV (formerly Liverpool Victoria) is aiming to take a much larger stake of the income protection (IP) market with a new 5 per cent premium discount on these long-term protection plans for the rest of 2010.
This discount will be automatically applied to all new IP quotes for the rest of the calendar year (the offer was launched on the 2nd of October 2010). Before taking out cover it is worth reading our LV Income Protection review.
This new discount represents a clear sign of LV's intention to grow its market share in this important insurance market and comes hot off the heals of its successful and profitable Mortgage and Lifestyle Protection plan. LV also states its intention to grow the IP market.
LV have also started looking at offering cover to more job types on an 'own occupation' basis, rather than a 'suited' or 'activities of daily living' definition, which would be a welcome development. Currently Friends Provident and Exeter Family Friendly Society (formerly called Pioneer) offer the widest range of job types on an own occupation basis.
LV is encouraging consumers to think about their current long-term protection arrangements and highlight the increasing difficultly in obtaining state incapacity benefit (which comes in the form of the Employment and Support Allowance).
The insurer asserts that only 6 per cent of applicants for the Employment and Support Allowance (ESA) were deemed as unable to work. This figure of 6 per cent is compared to the 83 per cent of applicants who would have qualified under the old Incapacity Benefit (IB).
In 2009, LV paid out for 90 per cent of income protection claims made, with an average annual payout of just over £11,740. The average claim with LV lasted for around 8 years and most claims were for back and psychological medical conditions.
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