Vitality has today announced a major overhaul of its individual protection offering including a range of changes to its income protection (IP) and serious illness cover.
This includes introducing private medical insurance (PMI) health benefits from its sister business Vitality Health to support member rehabilitation from certain core conditions, and higher claims payments depending on status within its Vitality programme.
The insurer said it was using the overhaul to simplify its offerings and meet evolving trends within the market.
Income protection
Vitality is consolidating its three IP products – Income Protection Plus, Income Protection and Short-term Income Protection (STIP) into a single product – in a bid to streamline the recommendation process.
The IP revamp includes an enhanced Recovery Benefit with private healthcare support which uses Vitality Health’s clinical capabilities.
Eligible claimants will receive access to private healthcare treatment to support their rehabilitation and return to work in three areas – musculoskeletal (MSK), mental health and cancer support.
The benefit is available from notification of claim and has no limit on the appropriate level of support.
Vitality said the new benefits target the top three conditions which account for 70% of all IP claims.
Vitality told Health & Protection: “The IP customer can continue to use the mental health support as long as their claims assessor deems that it is still appropriate and useful for them to help their recovery.
“This is the same for the musculoskeletal pathway as well. Our service partners will do an initial assessment of the customer and recommend an initial numbers of sessions, but additional sessions can be added afterwards.”
It is also launching Vitality Income Boost to all new IP policies which will increase member pay-outs by up to 20% for the first six months of a claim where the members are engaged with the programme.
The amount payable is based on their Vitality status – platinum members will receive 20% extra, gold members 15% and silver members 10%.
The additional cash payments will be paid for the full six months, irrespective of the length of claim and any financial limits. All Vitality members have access to the Vitality Programme where they are incentivised and rewarded for keeping active and increasing their Vitality status.
The insurer is also introducing seven-day, 24 month and 60 month deferred periods, as well as one year and five year payment periods to go alongside its existing options.
Guaranteed insurability options (GIOs) are being added to allow clients to change their cover, deferred periods and payment periods following a significant life event, and waiver of premium will be available on income protection premiums only.
Serious illness cover
Its serious illness cover (SIC) is being broken down into three options which allow one, two or three full payment claims respectively.
Vitality told Health & Protection in 2021 one in 13 claims were from claimants who had claimed previously on their plan. And of those who claimed previously, one in five were claiming for the third or more time.
It added that the underwriting process and limits will apply equally across all its serious illness cover products.
The options are:
- Serious illness cover 1X: covering 114 conditions on a severity-basis. It can pay out multiple times until all the cover amount is used.
- Serious illness cover 2X: covering an additional 29 conditions to Serious Illness Cover 1X (totaling 143), paying out in full for 74 conditions. This also aims to give members the security of full payouts for conditions typically covered in full by critical illness plans. This includes all those in the Association of British Insurers (ABI) guide to minimum standards. It pays out up to two times the level of cover chosen over the length of the plan through multiple claims.
- Serious illness cover 3X: Contains all the benefits of 2X, plus an additional 31 lower-severity conditions, covering 174 in total. Serious Illness Cover 3X covers every condition covered in market, alongside 60 conditions unique to Vitality, including the same conditions as 2X. It pays out up to three times the level of cover chosen over the length of the plan through multiple claims.
Vitality also announced changes to its child serious illness cover. All of a member’s children can be included on their plan for an additional monthly premium – £4, £6 or £8 per month depending on the product selected.
This includes congenital conditions and children’s funeral contribution as standard. Children also have access to the Vitality Programme at no additional cost and will qualify for Vitality Select or Plus based on the adult’s plan.
Vitality also revealed its serious illness cover plans will now include Vitality’s Dementia and FrailCare cover as standard. Cover will remain in place for as long as premiums are paid, and members have the opportunity to extend cover into retirement.
Multiple plan discount and healthchecks
Vitality is also introducing a multiple benefit plan discount which will offer reduced premiums for customers with at least two core covers.
And it has added new benefits to its Vitality Programme including a free health check in the first year for Vitality Plus members who are paying at least £45 per month in premiums.
Those members identified most at risk will also be given free advanced health screenings from BlueCrest.
The changes announced today will be automatically applied to all new policies taken out after 28 February 2023.
Justin Taurog, managing director of VitalityLife, told Health & Protection (pictured) there has been a move towards a core and enhanced market for protection cover.
“The SIC 1x product is very much in that core serious illness cover and critical illness market,” he said.
“It still covers more conditions than a typical core product and has more unique conditions and is more likely to pay out, but it’s very much looking at providing a core product.
“And then with that enhanced scale where the customer wants greater protection and is more likely to pay out SIC 2x and 3x plays very much to that enhanced market,” Taurog added.
