Unum has introduced a new underwriting approach to its individual income protection products that focuses on how people deal with illnesses, rather than on what illnesses they have had.
The previous method of underwriting is a painful process because the application forms were very long, with lots of personal questions; and if a GP report is requested it could take up to six weeks before you go on risk.
Unum has decided that it will no longer automatically request medical evidence from your GP, and instead of asking for a list of illnesses, it will ask questions such as “how much time did you take off work with this illness?” and “how often do you visit a GP?”.
Unum has been piloting the process for six months and it has been very successful.
Premiums have been cut by between 5 % and 20%.
Group protection specialist Unum is slashing the cost of its personal income protection cover in a bid to increase its share of the individual market.
Premium reductions of between 5% and 20% apply to the full range of individual income protection products including:
- Personal Income Replacement Plan
- Primary Income Replacement Plan
- Executive Income Replacement Plan, and
- Essential Abilities Cover.
For example, based on a 25-year-old non-smoking male, with a 13-week deferred period on his Personal Income Replacement Plan, the new monthly rate would be £37.80 versus the old rate of £46.77.
The maximum benefit available is increased to £200,000 a year.
Unum will provide a tax-free benefit of up to 50% of gross earnings, including dividends and P11D benefits, with no deduction for state benefits, under its personal income replacement plan.
Income protection: News update: June 2007
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