Burgesses aims product at the key person market
INVESTMENT WEEK - 12TH JUNE 2002
Underwriting agency Burgesses is launching a product combining income protection and accidental death benefit for use mainly in the key person market.
The product, DisabilitySAFE, pays out benefits in the event of a disability that prevents the policyholder from working, permanent total disability, or in the event of accidental death.
Although the plan can be taken out by individuals, the way in which benefits are calculated means it is more suited to small businesses wanting to indemnify themselves against the disability or death of key staff.
Used as key person protection, the plan can cover up to 10 times salary or benefits van be based on lost chargeable hours, making the plan appropriate for professional such as solicitors and accountants. For individuals, maximum benefits are based on 75% of salary. In both bases, benefits are paid out for a maximum of two years.
Cover is available after a deferred period of two, four, 13 or 26 weeks to all occupations, with no requirement for medical underwriting. The policy can be separated so that a company or person can take out accident only or illness only cover.
Premiums depend on the deferred period and benefit period, but as an example, a chief executive in their mid-30s requiring £1m cover against permanent disability by accident would pay £250 per year and to include cover against illness would cost £3,000 per annum.
Simon Burgess, managing partner at Burgesses’ said: “For individuals, most would be better of under standard income protection, but for businesses, where standard key person protection is so limited, you cannot beat this. Standard income protection will not cover those in occupational class three or four – we will cover anyone.”
