Sovereign has announced a number of enhancements to its Income Protection (IP) and Mortgage and Income Protection (MIP) products.
Aimed to give customers more options and greater flexibility, the enhancements are effective immediately with a pass back option for existing customers.
According to the insurer, the enhancements for IP include:
- A reduction in cost of Sovereign’s Premier Option to give customers greater value for money
- A higher payment amount for customers outside paid employment who claim under Occupation Class 5, to reflect the rising cost of homecare and support
- Removal of the offset calculation from the Bed Confinement Benefit
Key enhancements for MIP include:
- An increase in cover limits, to better reflect the changing financial environment including higher rental, mortgage and living costs
- The choice of 6 MIP wait periods: 4 weeks; 8 weeks; 13 weeks; 26 weeks (new); 52 weeks (new); 104 weeks (new)
- The customer’s ability to now opt for indexation across both the income or mortgage component of their cover, to protect themselves against future interest changes or inflation
- The customer’s ability to suspend cover if there are changes in their financial circumstances
- The option for fixed term premium pricing to help with financial planning and future certainty. This includes the option to fix for 10 years or to age 65, as well as rate for age.
Sovereign Chief Product and Marketing Officer, Len Elikhis, says with just a quarter of income earning Kiwis having income protection insurance, the industry needs to do more to promote and simplify this type of cover.
25% of Sovereign’s IP claims currently relate to mental health as the primary cause
“What we’ve noticed over the last couple of years has been an increase in mental health related claims,” said Elikhis.
He said 25% of Sovereign’s IP claims currently relate to mental health as the primary cause, with the number increasing when it comes to secondary cause.
“Therefore the focus for us has been to invest in that space to make sure that customers not only are receiving the financial entitlements that they expect from their policy but then are also receiving the support they need to recover,” Len explained, speaking to RiskinfoNZ.
“That’s something that can be lost sometimes within the contracts but is an important part of the overall service that insurers add and for advisers to understand the scope of those services can be helpful as well in recommending a product.”