Income Protection: Top 5 Myths
Helen Croft, Underwriting and Claims Strategy Manager
Thursday 10 January 2019
The protection industry advocates income protection as the most important personal insurance someone can have. And we need to encourage greater take-up of IP by consumers if they are too ill to work. By arming you with counterarguments to the most common misconceptions, AIG can help you explain to your clients why income protection is easy to apply for and accessible to the many.
Myth 1: People with pre-existing medical conditions cannot get income protection
Actually, AIG covers 85% of customers who apply for income protection1.
We consider several factors about each person when underwriting them for IP, including their occupation, and it might be that AIG will offer non-standard terms for IP as a result. But you can help a client understand what the terms might be by having a conversation with one of our pre-sales underwriters via our underwriting helpline.
Did you know people with diabetes or a history of cancer are now eligible for IP too? It’s only fair that as many customers as possible have access to insurance, so AIG regularly looks at how we can help more people and we now make it possible for individuals with diabetes to get cover.
The survival rate for cancer is continuing to rise, and there are people who have survived cancer who need to have protection in place. We now offer IP to applicants who have not had a recurrence of their disease within the last 10 years.
Myth 2: Manual workers cannot get an own occupation definition
This might have been the case historically, but there has been a change in recent years to allow more own occupation definitions. AIG can now insure HGV drivers, care workers, builders and many other ‘manual’ occupations under own occupation cover. We’re currently reviewing our occupation rules for IP and will be able to insure even more people under an ‘own occupation’ definition in 2019.
Myth 3: Self-employed people cannot get income protection
AIG regularly underwrites self-employed people for income protection.
Our online system can assess most of these applications quickly and we have straightforward philosophies in place to make the process of applying for IP easy for the self-employed. We use the personal taxable income and provide clear guidance in the application process for self-employed applicants.
Myth 4: Financial underwriting is complex and arduous
Most financial underwriting is done online and with no evidence needed, using just a person’s salary and details of any existing cover to make an immediate decision. This makes financial underwriting a quick and easy process.
We don’t need evidence of earnings until the sum assured for income protection is over £75,000 a year. For cases of that size, we have a specialist High Net Worth underwriting team who are experts in financial underwriting. If proof of earnings are required, we usually ask for the P60 for the employed person applying, or for the accounts of self-employed individuals.
Myth 5: Income protection underwriting is complex and needs a lot of evidence
60% of income protection applications get an immediate decision without requesting any evidence.
This is down to AIG’s intelligent underwriting system applying smart rules to assess a large number of medical conditions instantly. If a customer’s application needs additional underwriting, it’s managed by one of our 56 expert underwriters who will deal with case referrals within four hours of the application being submitted. Our underwriters use their experience and skills to obtain medical or financial evidence when it’s really needed. We only request GP evidence in under 10% of cases2, so most applications can be assessed without additional evidence or delays.
At AIG Life, we continuously push ourselves to make the process of underwriting IP as easy, and affordable, as possible so more people can get the cover they need.
Talk to the pre-sales underwriting team today about clients that you previously thought we might not be able to help. Access to IP insurance might be simpler than you think for your clients.
1Internal MI 2018
2Internal MI 2018