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Protection specialist LV= is launching two protection products for small businesses and workers worried about paying their mortgage or rent.
LV= Mortgage and Rent Cover adopts an innovative and simple outgoings-based approach, targeted at regular earners or those with variable incomes who want to protect their mortgage or rent outgoings. The LV= Executive Income Protection is designed to help smaller businesses provide sick pay benefits to their employees.
LV= Mortgage and Rent Cover provides simple, affordable protection with no evidence of minimum hours worked or proof of income required, when applying or making a claim. Developed following consultation with advisers, it can help those who traditional income protection may not always be suitable for, such as freelance or flexible workers who find it difficult to prove their earnings. If the customer is unable to work due to illness or injury, their mortgage or rental payments on their main residence will be covered up to £2,000 a month for a maximum of one or two years per claim.
The LV= Mortgage and Rent Guarantee ensures that the selected amount of cover will be paid throughout the claim. As part of the application process the adviser will need to validate that the cover amount does not exceed the customer’s mortgage or rent payments, and obtain documentary evidence from the customer to support this, such as a copy of their mortgage offer or formal rental agreement The level of cover can be adjusted by the customer during the lifespan of the policy to account for life events such as moving house.
LV= Executive Income Protection is designed for smaller businesses that find it difficult to access Group Protection, offering monthly sick pay benefits to key employees.
If an employee is unable to work due to illness or injury, the employer can make a claim, and uses the payments to provide sick pay to their employee (via PAYE) in place of their employee’s monthly salary. LV= will cover 80% of their earnings up to £300,000 a year for level cover and £225,000 a year for inflation-linked cover.
Under Executive Income Protection, additional cover can be taken out for employer pension scheme contributions and National Insurance employer contributions. For added flexibility, as long as a claim is not being paid at the time, if the covered employee leaves their place of work, the policy can be transferred to their new employer within 90 days if the employee wants to keep their protection in place after moving jobs.
The policy can be included as part of the same application for other LV= Business Protection policies and employers can also benefit from LV= Business Care, a free business service offering legal, tax and VAT advice.
LV=’s new income protection insurance products are designed to provide peace of mind for people worried about how illness or injury will affect their finances.
As an industry we are good at tinkering with our core products and adding feature after feature, but there are times when the right thing to do is to start fresh and design new products to meet a specific target market.
We rose to this challenge with LV= Mortgage and Rent Cover - delivering a simple-to-explain solution, offering no-nonsense certainty, with a clear focus on helping under-served consumers who are more prone to income shocks.
Advisers have a great opportunity to proactively connect with customers at the point when they are taking on long term financial commitments such as a mortgage or rental contract. Communicating the value of insurance and providing protection solutions at the right time in those discussions is essential.
LV= can support these conversations in a targeted way and help advisers with easy- to- understand, focused solutions for their clients.