L&G improves income protection product

The improvements made to the product mean that state benefits will no longer be deducted from monthly benefit payments, while there will be a 5% premium discount for all full spinal and mental illness exclusions and 3% on partial spinal exclusions, Ryan Bembridge writes.

An income guarantee has been introduced for the lesser of £1,500 or the monthly benefit amount specified in the policy schedule. Plus all customers in Legal and General’s occupation classes 1 to 4 will be covered for their own occupation.

Georgina Shield, senior product manager for income protection benefit at Legal and General Protection, said: “We continually strive to improve our products wherever we can and there is a strong desire to offer customers a fair policy that provides them with the cover they require and expect from the outset.

“Put simply, if a claim is made under life or critical illness cover the policy pays out the expected amount.

“However, if the life assured became ill or incapacitated our previous IPB policy sometimes saw claimants get a lower benefit than they expected. We wanted to put that right and this product does just that.”

The changes follow a full strategic review of income protection benefit, which included feedback from Legal & General’s IFA division, banks and building societies, Legal & General Network and other key stakeholders including consumers and advisers.

Shield added: “Our research confirms that complexity of the product can sometimes create confusion for the consumer so therefore advice remains a key part of the purchase process.

“Our hope is that these improvements and our supporting material will help advisers and consumers to make informed and well researched decisions.”

Peter Le Beau, chairman of the Income Protection Task Force, said: "I am delighted to see Legal & General being prepared to take income protection very seriously.

“Their new product looks very competitive and a lot of thought has gone into developing areas where there was room for improvement like the extension of the own occupation definition and the income guarantee.

“I also like their openness over claims disclosure. I think this has a very positive influence on other leading offices."