The pandemic has made people much more sensitive to the impact of not being able to work and how it can affect their domestic finances.
While previously many might have taken a relaxed approach to income protection insurance and perhaps not seen it as an essential part of their financial toolkit, the experience of a year of on-off lockdowns and business closure has had a dramatic impact on the way many people now look at money and in particular, the importance they now attach to a regular, secure income. 
Historically, income protection has been viewed as difficult to take out, with complex underwriting rules and a long list of exclusions which limited the situations when a policy might pay out.
The more comprehensive insurance products would often have had requirements for a personal medical to be undertaken, prior to policy underwriting and acceptance for the policy.
For example, pre-existing medical conditions could become a reason to exclude a person from cover or to load the premium, thus pushing the cost up still further.
Back to basics to keep costs low
Against this background, National Friendly, the 150-year-old Bristol-based insurer, has taken a bold step to both simplify the market and to make income protection far more accessible to a much wider audience.
Its approach has been simple, to design an insurance policy which goes back to basics, by just offering income protection in the event of an accident which would prevent the policyholder from working, something its own research shows to be important amongst its target market. Covering accident only means no medical questions and a simpler route to taking out a policy.
Our feedback, when we talk to the people who actually buy this kind of insurance, suggests that very few people ever expect to get ill and as a result to not be able to work. People feel naturally carefree, unless they have had a serious illness, in which case the insurance challenge will always be more complex.
But suggesting to a client that they can protect their income, if they are unable to work as a result of an accident, rather than illness, meets with a ready understanding. People can visualise the situation, and post pandemic have a heightened appreciation of the importance of protecting their income, so we are finding the product is going down very well indeed.
Pandemic principles – less face-to-face medical contact (and prevention is better than cure)
While National Friendly’s policy won’t cover illness, it does help its policyholders through its partnership with HealthHero in another nod to the important changes the pandemic will likely have on the administration of health insurance.
The insurer believes the way in which personal healthcare will be delivered in the future will evolve into a situation where a reduction in face to face contact is likely to be a continuing theme.
HealthHero is a leading digital provider of remote primary healthcare. Policyholders of National Friendly’s Accident Only Income Protection insurance have unlimited telephone or video access to HealthHero’s panel of private GPs. Other services available include Emotional Wellbeing and Aches & Pains consultations. This grants clients timely access to experts to discuss mental health or musculoskeletal concerns, self-help and next steps.
The fun bits too – sports are covered
In another departure from the norm, National Friendly has an option to cover hazardous sports as part of its policy, so injuries which result from a list of sports are included in the cover and policyholders will benefit from their income being protected. Whilst some sports are covered under standard cover, such as football and cycling, others like gymnastics and skydiving, can be covered if a customer chooses to pay a higher premium.
In conclusion, our new approach to this market, which is to offer a low cost policy that covers the most obvious eventualities is, in our opinion, the right approach. Certainly the feedback from the market seems to support that idea so far.
National Friendly is an award-winning Bristol-based insurer specialising in health and protection insurance, helping clients prepare for life’s contingencies since 1868.
