Legal & General has launched two new income protection products amid growing awareness for financial resilience in the wake of the Covid-19 pandemic.
The two new products, Low Start Income Protection and Executive Income Protection, will provide advisers with more options for clients who are increasingly requiring tailored financial products to meet their needs, while addressing the “urgent national focus on health and personal finance” that has been driven by recent events, the insurance group added.
Low Start Income Protection enables clients to purchase income protection with lower premiums than traditional income protection at the start, increasing annually. It is designed for customers who would be unable to immediately afford to take out income protection.
Craig Brown, director, intermediary insurance, Legal & General, says: “With just one in 10 people protecting their income, it’s clear there is an income protection gap in the UK which could widen as people cut back on spending due to the economic impact of Covid-19. However, the pandemic has also led to growing awareness of the crucial need for people and businesses to protect their income in case of illness or injury.”
Brown added that the two new products would give advisers “an even better opportunity” to help clients in their bid for financial resilience.
Meanwhile L&G’s Executive Income Protection has been designed to target small business owners and higher earners.
The product allows small and medium-sized businesses to pay a monthly benefit to an employee if they are unable to work due to illness or injury. Employers can provide for 80% of an employee’s earnings, dividends and P11D benefits, while additional cover can be arranged for other costs including pensions and National Insurance contributions.
The two new products join L&G’s existing income protection products, Income Protection Benefit and Rental Income Protection Benefit.
Alan Richardson, head of business protection and group, Lifesearch, said: “Covid-19 will have affected the profits of many companies and it is these retained profits that many business owners would have been using as their rainy day fund. The depletion of these funds leaves business owners at risk, so having a sick pay insurance policy in place is more important than ever
“Arranging an income protection policy through one’s business not only covers an important employee’s sick pay should they be signed off work, it also addresses the often forgotten need to continue to pay into their company-based pension. Unfortunately understanding of the executive income protection product outside specialist teams is poor due to complex underwriting processes from insurers, lack of experience among advisers and, in a large part, because of a lack of options.”
