Aviva has launched a cost of living support scheme allowing existing individual protection customers to cut the value of their cover.
However policyholders will need to answer medical questions later if they wish to reinstate their protection to the original value.
The scheme operates alongside the insurer’s payment deferral option introduced during Covid 19 for customers experiencing short-term financial difficulty.
It aims to help customers with long term financial worries retain protection cover over coming years by reducing the sum assured on their policy in a bid to make premiums more manageable, Aviva said.
Customers can buy a top-up policy to bring cover back to a maximum level after one or two years when their finances are on a more stable footing.
Advisers can notify Aviva about any customer requiring such support and provide advice on their options.
Customers who contact Aviva directly to discuss their money worries will be prompted to speak to their adviser ahead of making a decision.
Should they opt to proceed without advice Aviva will contact the adviser, after gaining the customer’s consent, to tell them of the change and ensure they are copied into any relevant future correspondence.
Aviva will also send communication nudges to customers and their advisers after one year and again after two years, to remind them of the opportunity to bring their cover back up to a maximum of its previous level.
It said topping up would be “a simple process of purchasing a new policy for the extra cover with a few medical questions”.
When Aviva top’s up a customer’s cover, it noted it can only offer an equivalent policy available at that time which while it may be broadly similar, may differ in price, eligibilty and terms and conditions to their current policy.
Customers can apply to buy more cover at any other point, or extend it beyond the original cover level, by going through the insurer’s standard application process, it added.
Aviva will be hosting a series of online adviser events about the cost of living, using a case study to show the options and tools available to help their customers in similar situations.
They will also highlight how advisers can track warning signs of customer lapses and cancellations as well as the mechanisms to help put payment back in place.
Aviva’s existing payment deferral support remains in place for all customers, based upon their circumstances, irrespective of their policy type.
In May of the first year of the pandemic, Aviva introduced protection premium deferrals for three months, enabling customers struggling as a result of Covid to spread payments over the coming nine months. This was maintained throughout the pandemic, with eligibilty extended until March of last year to allow customers with a different range of circumstances to apply for additional short-term support.
The insurer said it is currently not seeing any material increase in policy lapses, but by offering both support schemes, it is aiming to help as many customers as possible to maintain some cover at a time when they may need it most, while ensuring advisers are kept involved in managing their existing customers.
Fran Bruce, managing director of protection at Aviva, (pictured) said: “We recognise that the cost of living is very difficult for people and it is unclear when things will improve, so alongside our short-term assistance, we have expanded the options to increase flexibility and address customers’ future needs, as well as highlighting the importance of advice in the process.
“We know when times are tough for customers, they are tough for advisers, so we have expanded the support and tools available on Connect to make managing existing customers’ policies easier for them.
“By making these changes, we aim to help advisers work with their clients to keep some cover in place rather than cancelling their policy outright.
“If financial pressures ease in a year or two, we’ll provide a simple route to return the protection cover back up to a maximum of the customer’s previous level.”