August 13, 2008 | posted by Pam Atherton in Insurance |

Insurers are under pressure to ‘treat their customers fairly’ so it is good to see Norwich Union doing just that with its revamped income protection plan which provides flexibility and strong after care service.

Income protection is an insurance which pays out if you are too ill to work for a long period. If you are so ill that you can’t ever work again, it will pay out until retirement.

You can choose the level of earnings you want to be paid while off sick. There is a selection of eight deferment periods  of between 4 and 112 weeks (the time before payments kick in) so that you can dovetail the policy with any existing cover you may have through workplace benefits or existing savings. 

The plan is also flexible in that you can choose for it to pay out until any retirement age between 50 and 70, which is good news if you intend to continue working in retirement.

Guaranteed (fixed) or reviewable premiums are available, as is indexation of benefits in line with RPI. There are also no standard exclusions.

The maximum payout is 60 per cent of the first 25,000 of annual earnings and 50 per cent of the remainder up to £180,000 -  one of the highest benefit levels in the market.

Another attractive feature is the rehabilitation service, which gives you access to trained medical staff to help you get back to work.

On the downside, if you want to extend existing cover, you may have to set up a new policy to reflect your current state of health, which could mean an increase in premiums.

Defaqto life and protection principal, Ben Heffer, says: “Where NU has something new to add is in the area of claims management, in that claims are dealt with over the phone by a dedicated team of claims advisers. Policyholders have access to an online and telephone-based health management tool, including 24 hour GP helpline and Stress Helpline.”

Income protection is a complex product and independent financial advice is strongly recommended.
To find an IFA in your area visit:
www.unbiased.co.uk

For more income protection, read the Defaqto guide:
http://www.defaqto.com/consumer/insurance/life/income-protection.aspx