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LV= Personal Sick Pay, tailored income protection designed for riskier occupations

Personal Sick Pay

Product profile for Personal Sick Pay

Read below a summary of the relevant product information about Personal Sick Pay, in accordance with the Insurance Distribution Directive. Designed to help you make an informed decision and comparison for your client, we set out the product’s target market, distribution strategy, suitability, main features, risks, options and costs.

This information is also available in downloadable pdf format.

Waiver of Premium can be added as a separate policy. Read about our Waiver of Premium product profile.

This is only a summary of the product features. For more information please read the Policy Summary and Policy Conditions.

Target market

This product is for employed or self-employed clients who need a monthly or weekly benefit to help replace some of their income if they were unable to work due to an accident or long-term sickness. It can be used to help support their and /or their family’s current lifestyle and financial commitments.

It is aimed at clients in riskier jobs who can be more expensive to insure, such as tradespeople and nurses.

The product offers a choice of waiting periods to reflect the financial needs and circumstances of your client.

The product covers your client for up to 60% of their income if they’re unable to work due to accident or sickness. You can also recommend this type of income protection to clients who find it difficult to prove how much they earn, such as the self-employed or contract workers. It also includes a number of unique features especially for people working in these types of occupations.

We offer two versions of our Personal Sick Pay policy, our standard policy and our lower cost budget policy.

Under standard Personal Sick Pay, they’ll be covered until they’re able to return to work, or their policy ends (whichever is soonest). They can make as many claims as they need to during the policy term (even for the same illness or injury), providing they’ve been back at work for at least six months between claims.

They can make as many claims as they need to during the policy term. If the claim is for the same illness or injury and within 6 months of returning to work, we may be able to start your client’s income protection payments again straight away, without having to wait for their waiting period. If your client is unable to work because of a different reason, we will treat it as a new claim and they will need to wait for their waiting period to end before the payments start.

Budget Personal Sick Pay works in exactly the same way as our standard policy with just one difference, we’ll only pay your client for a maximum of 24 months for a single claim. As with our standard Personal Sick Pay policy your client can make multiple claims if they need to, providing they’ve been back at work for at least six months between claims. Our budget policy is aimed as those clients looking for a lower premium, but whose protection needs can still be met with a limited benefit payment period.

As with our standard Personal Sick Pay your client can make multiple claims if they need to. If the claim is for the same illness or injury and within 6 months of returning to work, we may be able to start your client’s income protection payments again straight away, without having to wait for the waiting period as long as they haven’t reach the maximum claim limit. If your client is unable to work because of a different reason, we will treat it as a new claim and they will need to wait for their waiting period to end before the payments start.

Personal Sick Pay has age-costed premiums. The cover is worked out on a cost per £1,000 of cover basis, and the amount your client pays each month increases over the term of the policy as they get older.

For clients in more traditional less risky occupations such as office workers our FPP Income Protection policy may be more suitable.

Distribution

To ensure your clients receive the right level of protection and to reduce the risk of the policy not paying out due to non-disclosure, we believe this product should only be sold on an advised basis, face to face or over the phone.

It’s important to regularly review your client’s circumstances and protection needs to make sure their cover is appropriate and they are not paying for cover that they can’t claim on.

Main features

  • Pays a regular income benefit in the event the client is unable to work because of accident or sickness
  • Choice of weekly or monthly benefit
  • Own occupation definition of disability
  • Benefits paid until return to work or the policy ends, whichever is the earlier. Benefits limited to a maximum of two years per claim under the Budget option
  • Level or inflation-linked cover
  • Automatically includes the Personal Sick Pay Guarantee
  • Guaranteed or reviewable age-costed premiums
  • Waiver of Premium option

What is not covered

  • We won't pay a claim if your client becomes unemployed or is made redundant
  • The policy won’t pay out if the client is ill but continues to work
  • We won’t pay out in the event of a normal pregnancy

Risks

  • There is no cash in value at any time
  • If your client stops paying their premiums, their cover may cease
  • If your client chooses level cover, it won't keep up with inflation and could buy less in the future
  • Benefits paid at claim may reduce any state benefits your client might be entitled to

Limits and basis

  • The minimum term is 5 years. The policy must end before the insured person reaches the age of 70
  • Clients can choose to take out a policy on a single life basis, on themselves or on a life of another
  • Clients can insure up to 60% of their earnings, subject to a minimum amount of cover of £6,000 a year (£500 a month) and a maximum of £100,000 a year (£8,333 a month)
  • A choice of waiting periods
    - Day one option covers your client from first day they become too ill to work. However your client will need to be unable to work for at least 3 days in a row before they can claim.
    - Your client can also choose from 1, 4, 8, 13, 26 or 52 week options and will need to be unwell for an appropriate number of weeks before they can claim.
  • Any claim lasts until the earlier of the policy end date, your client dies or gets better
  • Under the budget version, the maximum claim period per claim is two years
  • Under reviewable age-costed premiums, the price in the future for each £1 of Personal Sick Pay is guaranteed to go up each year at the rate set out in the Reviewable Future Price table for the first 5 years. After that we’ll review the prices in the table every 5 years and the amounts quoted in the table could change (either up or down) every 5 years.
  • If your client is insuring someone else an insurable interest must exist at the start of the policy. A spouse or civil partner is automatically assumed to have an insurable interest.

Eligibility

To apply your client must be:

  • Permanently living in the UK
  • A UK resident for at least the last 2 years
  • Aged between 17 and 59
  • Registered with a UK doctor for at least the last 2 years
  • Employed, or self-employed. Cover isn’t available for homemakers, and if your client is claiming job seekers allowance when applying for the policy they will be considered unemployed and won’t be eligible for Personal Sick Pay.

Suitability

Is suitable for:

  • Protecting up to 60% of gross income (assessed at point of claim), if your client becomes unable to work due to illness or accident
  • Those whose need for cover expires before they reach age 70 as this is the maximum age at which the policy can end
  • Clients who need cover for at least 5 years, as this is the minimum term for this policy
  • Those whose current level of income means state benefits alone would not provide a suitable level of replacement income for them
  • Clients who wouldn’t qualify for state benefits, or wouldn’t want to rely on them for replacement income
  • Providing a guarantee to pay up to the first £1,000 of cover without any deductions, as long as your client is working at least 30 hours a week and in receipt of an income. Please note this only applies for the first two years of any claim, after that we’ll ask for evidence of income and the maximum cover is 60% of your clients gross income (assessed at the point of claim)
  • Clients who have an occupation covered by the policy
  • Clients where a waiting period of 1, 4, 8, 13, 26 or 52 weeks would be appropriate for their needs. We also offer a day 1 option for clients who need their money sooner
  • Insuring someone else, where insurable interest exists

Is not suitable for:

  • Clients who already have sufficient other forms of accident and sickness insurance in place that pay a monthly benefit if unable to work due to accident or sickness. For example mortgage protection, insurance or credit card protection that mean additional protection against loss of income is not needed. This is because we deduct amounts equal to the payments from other insurances that the client has when we pay their claim.
  • Clients who don't need to protect their income, if they’re unable to work due to accident or sickness as they have savings which they’re prepared to use if they suffered a loss of income (referred to as self-insuring)
  • Clients looking to protect against unemployment, as this policy only protects for loss of income if they’re unable to work because of sickness or an accident
  • Clients who’ve already retired
  • Clients whose current level of income means they are able to rely on state benefits to meet any income shortfall (and are willing to rely on state benefit payments to provide income replacement)
  • Those looking to protect against terminal or critical illness with a lump sum pay out
  • Businesses wanting to provide income protection for a key employee if they’re unable to work due to accident or sickness. This is because any benefits which are paid to the employee by their employer would have to be paid under PAYE, meaning the employee would receive significantly less than 60% of their income. There are other more suitable products in the market to protect a key person’s income.

Options and additional benefits

Personal Sick Pay Guarantee: For insurance of up to £1,000 a month, where your client is receiving an income and normally working at least 30 hours a week, we will pay your client either £1000 a month or the amount of cover, whichever is lower. The Guarantee is automatically included at no added cost, and conditions apply. For more details, refer to the Policy Terms and Conditions.

Back to work support: We want to help your client with their recovery and return to work and can sometimes offer your client access to specialist services. For example: physiotherapy, counselling or other specialist treatment, rehabilitation services or financial support. The maximum we can pay for each claim is one month’s insurance payment. If your client makes a claim our team will look at their individual situation to see if there is anything they can do to help – all services offered are at our discretion.

Member benefits: With this policy your client automatically becomes a member and is entitled to a range of benefits, at no added cost. These include voting rights, free advice helplines and discounts on selected LV= products. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= membership and member benefits are available at LV.com/members.

LV= Doctor Services: All new policyholders have access to a number of app-based medical services and advice, at no added cost. These include virtual GP consultations, prescription and second opinion services. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. For more details visit LV.com.

Waiver of Premium: Your client can add Waiver of Premium when they take out their policy, or once it is in place. We set this up as a separate policy and an additional cost. For more details, refer to the Waiver of Premium Product Profile and Waiver of Premium Policy Terms and Conditions.

Costs

The policy premium also includes a fee, which is a fixed monthly amount, to cover administration and support costs.

Dr Services is provided by Square Health Limited. This Service is not regulated by the Financial Conduct Authority or Prudential Regulation Authority.

0800 678 1890

TextDirect: first dial 18001

9am - 5.30pm Monday - Friday

We will record and/or monitor calls for training and audit purposes.

Literature

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Flexible Protection Plan

Why not add Life cover or Critical Illness to your client's plan for a wider protection portfolio?

More on Flexible Protection Plan

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Income Protection

Protect your clients' income if they can't work due to long term accident or sickness.

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Claims hub

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LV=, County Gates, Bournemouth, BH1 2NF, UK