If you have recently become self employed, are a part time worker, have a fluctuating income or have no earnings history then a new income protection product from insurers, British Friendly may be perfect for you.
Many income protection policies allow you to cover up to 70% of your gross income but ask for proof of income at application or claims stage. This can be a problem for certain people such as those who have recently become self employed in a completely new field where they have no history of earnings. The “Breathing Space” income protection product bypasses this issue as it does not ask for any proof of income, only proof that you are working (employed or self employed).You can be covered up to the age of 65 (maximum age of 59 at application) and select a benefit payout period of 1, 2 or 5 years. The maximum payout is £250 per week (tax free) up to £13,000 per annum.
There is good news for smokers and those in higher risk occupations, such as those undertaking manual work, as British Friendly will not charge them more for premiums. However, there are some occupations which are considered very dangerous such as being an oil rig worker, in the fire service or the armed forces which cannot be covered.
British Friendly offer Own Occupation cover which means that when assessing a claim they will look at whether you can do your own job. The waiting or deferred period is 4 weeks and multiple claims can be made under one policy even for the same condition, as long as you have been back at work for six months. There are no standard exclusions for medical conditions but British Friendly may exclude a medical condition you have had in the past.
British Friendly have an excellent payout rate, they paid of 97% of income protection claims in 2012 which was the highest published rate. The product is similar to Exeter Family Friendly’s product Bills and Things but with a slightly higher maximum benefit and the option of a longer payout period. It is also good for part time workers as there is no minimum working hours requirement. However Exeter Family Friendly will provide cover for people until the age of 68 which is three years longer than British Friendly.
Mark Myers, CEO of British Friendly states: “... Policyholders can be confident that when they claim they will receive the cover they have paid for, as no deductions are made for existing benefits such as sick pay, other insurance pay-outs, or state benefits.”
“Adviser feedback suggests the new Breathing Space cover will appeal to a wide range of people including manual workers, the self employed and part-time workers, to provide a cash boost to cover the bills in the event of being unable to work due to ill health.”
I had the pleasure of dealing with Jake Mills in organising my insurance. Jake was fantastic to deal with — his patience and understanding really helped.