Vitality has reintroduced its earnings guarantee on personal protection plans with income protection (IP) cover.
The feature was removed in March 2020 as part of restrictions placed on IP products by the insurer following the outbreak of Covid-19.
Vitality told Health & Protection that while it has removed most restrictions brought in as a result of Covid, some remained on cover levels for customers over 60 and that it is not offering income protection with a seven day deferred period.
The reinstated earings guarantee means members taking out an IP policy can guarantee their monthly benefit of up to £8,000. This means at the point of claim current salary will not be taken into account when working out the maximum benefit payable.
As part of this feature, members can verify their earnings at any point within the first six months of their plan. Existing policyholders will be able to verify their earnings as long as they are within the first six months of their plan.
Additionally, monthly benefits of less than £1,500 will continue to be automatically guaranteed and members will not have to verify their earnings for these plans upfront.
Nick Telfer, head of protection specialists at Vitality, (pictured) said: “Members shouldn’t have to worry that they will receive a reduced monthly benefit if they have to reduce their working hours due to ill health before ultimately being unable to work.
“Our unique earnings guarantee feature enables our members to protect the salary they had when they took out the policy, and we are delighted to be able to instate this feature of our income protection product that we know is so popular with advisers.”
Also commenting on today’s development, Adam Higgs, head of research at Protection Guru, said the rise of the gig economy and alternative remuneration models has meant that more people than ever had fluctuating incomes, which was a big problem when recommending income protection.
“The move to reinstate their earnings guarantee once again makes Vitality a strong proposition for any client that falls into this camp,” Higgs added.
“From a clients’ point of view, it can provide them with the certainty that the level of cover they have been paying for is the amount that will be paid out in the event of a claim as long as they meet the minimum number of hours worked per week regardless of their level of earnings.”