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Client protection cover needs checking

24 May 2020

Advisers should ensure clients have the right protection insurance in place and continue to maintain existing cover, despite Covid-19 causing financial difficulties, says LEBC Group. 

According to Kay Ingram, director of public policy atLEBC Group, life and health cover is critical to a client’s long-term financial wellbeing and should be maintained even if clients are worried about the affordability of premiums.

Ingram says advisers should help clients worried about the cost to explore all the options available.

She says: “During the current emergency, many insurers are taking a more flexible approach and some have introduced special terms for an initial period to help policyholders facing temporary hardship.”

Ingram advises that clients with cover check whether their policy includes a waiver of premium, should they be unable to work as a result of sickness or have been made redundant, as well as a career break option.

Advisers should also check their clients’ employer-funded cover, which depending on the terms of the employer’s funded scheme, may or may not see the sum assured reduced if the client’s pay decreases due to furlough or short-time working. Finally, Ingram recommends ensuring there is an up to date nomination form so that the scheme trustees know who the client wants any claim paid to.

Ingram adds: “Those who already have cover, but who are struggling to pay their premiums as a result of sickness or reduced income, should look to see whether they can benefit from a temporary premium holiday under the terms of their policy.

“Employees may be covered by an employer scheme, and if on furlough, should check with their employer whether this affects their life and health cover; if they are made redundant this cover will cease.  Where existing policies leave a shortfall, a top-up may be possible.”

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