• Part-time workers (under 16 hours per week) covered as own occupation
• Own occupation benefit provided for the full life of policy and throughout claims
• 90 job types to be newly covered as own occupation
Aviva is to underwrite all individual income protection (IP) policies on an own occupation basis, in a bid to simplify income protection cover and ensure as many claims as possible are paid.
The own occupation terms will remain throughout the life of the policy and all claims will be paid on this basis for the full duration of the claim.
The changes will be applied to all new individual IP policies from 21 October 2013, including part-time cases where the customer works fewer than 16 hours a week. Part-time roles of fewer than 16 hours a week are treated differently to full-time jobs by many insurers, so this move is understood to be a first for the industry.
The move builds on Aviva's previous position of writing 95% of policies on an own occupation basis. The latest enhancements are designed to further improve the insurer's already strong payment record of 93.5% of individual income protection claims.
Around 90 job types will be newly underwritten under own occupation terms as a result of the changes. The majority of these occupations are driving roles, but also include specific teaching professions such as PE teacher and music teacher, as well as postal delivery people (see below).
Craig Colton, protection managing director for Aviva says: "We're committed to paying as many claims as possible, so we have decided to make income protection simple and straightforward for all our customers.
"With just one definition for all the occupations we cover, anyone who is incapacitated and cannot do the duties of their occupation can be confident they will have a successful claim – regardless of what they do and how many hours they work.
"Income protection is one of the most useful types of insurance on the market, given that it can provide a regular income right up to retirement. Our average payment term for IP customers is more than nine years, so it's clear to see the benefits it affords. We have an excellent claims payment record at Aviva and by moving to 100% own occupation terms we fully expect to help even more customers if they are unable to work in the future."
The top 10 jobs which will now be covered as own occupation are:
• Taxi Driver
• Delivery Driver
• Driving Instructor
• Fitness Instructor
• Bus Driver
• PE Teacher
• Paramedic (Driver)
• Music Teacher
Note that with an 'own occupation' policy an insurer will pay out if the claimant cannot do their own job (as defined in the policy documents and these may vary from insurer to insurer) as opposed to an 'any occupation' policy where the claimant will only get a payout if they cannot do any job at all. If in doubt consult a properly qualified and regulated financial adviser.