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LV= maintains payment break option to support vulnerable customers

16/02/2022
PROTECTION
  • Introduced in April 2020, payment breaks enable financially vulnerable members to maintain cover if they were experiencing financial difficulties 
  • Now permanently open to vulnerable customers, eligible members unable to pay their premiums can apply for a maximum of three months
  • 93% of members that were granted a payment break were self-employed 

Protection specialist LV= is to continue offering its payment break option permanently to maintain support for vulnerable customers. 

Initially launched during the coronavirus pandemic to help LV= members facing financial difficulties, the payment break enables vulnerable members with protection policies to stop paying premiums for a limited period without losing cover.

Payment breaks are offered a month at a time, for up to three months with no requirement for premiums to be repaid. Existing members that qualify can still make a claim in the usual way, as their cover will remain in place in line with the terms and conditions of their policy.

LV= staff are available to talk with members to understand their situation, signpost existing options and services available through their existing policy  before considering any payment break.

Since April 2020, more than 300 customers have benefited from the Payment Break option. Self-employed workers account for the majority of eligible members (93%), who would have no state benefit support or no other employee benefits if they were unable to work due to illness or injury.

The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000+ UK adults– reveals:

  • Almost half of self-employed people (47%) said their financial situation had worsened in the past three months
  • 30% would describe themselves as struggling financially, as 44% have worried about money in the last three months 
  • One in five self-employed people (20%) have asked a mortgage provider, insurance provider or bank for flexibility in the past three months compared to 4% of all consumers

“As energy prices and day-to-day living costs are rising, people are looking at ways to rein in their spending. Many are considering cancelling insurance policies, but it is important that they understand the value of protection generally and specifically the benefits that income protection provides.

“Statutory sick pay, for example, amounts to just £99.35 a week and groups that are vulnerable to financial hardship, such as renters or self-employed workers, would struggle financially if accident or illness prevents them working.

“People may question if they can afford protection, but it offers huge benefits and the financial impact of a serious illness or accident can be devastating.

“LV= offers payment breaks*** for the most vulnerable people who are struggling to pay protection premiums and we can work with advisers to help clients retain their cover.”


 
Mike FarrellMike Farrell, Protection Sales Director at LV=

Notes

* This includes both new claims and claims made before 1 January 2022, that were still in payment during 2022
** LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in December 2021 and March 2022
*** Terms and conditions apply