Now, more than ever, it is important that customers maintain the protection cover they have, so where possible, we’ve added extra flexibility to our protection products. If your clients’ income has been impacted by coronavirus, we have introduced three options, so your clients can adapt their policies to their personal circumstances.
We hope the ability to defer premiums will provide support to those who need it the most. We want to ensure customers keep their cover, but we know once a customer has built up arrears, it may be difficult to bring the plan back on track, so it is important to keep this in mind when discussing the options with your clients.
We have introduced a new option whereby protection customers can defer their premium payments for up to three months, without any reduction in cover, if they’re experiencing financial difficulties.
If any of your clients with a Zurich protection policy need a premium deferral, please ask them to get in touch with us directly.
How does it work?
Please ask your client to call our customer service team on 0370 241 6945 and ask for a premium deferral. We will discuss their personal situation and explain the options available to them, including premium deferral. Once they’ve confirmed they’d like to defer their premiums, we’ll email them to let them know that their premiums have been deferred, the date of premium re-commencement and the repayment method.
Once the deferral period has ended, customers can choose if they’d like to pay the outstanding premiums in one go or repay them over a period of a few months. Customers with policies taken out before September 2018 will have up to the end of 2020 to repay the premiums. Customers on the Life Protection Platform (policy numbers with the prefix PR) will need to repay the outstanding amount in two months.
Unearned indemnity commission won’t be affected by premium deferral provided that the customer keeps the policy going after the deferral period and pays back the outstanding premiums.
We will not be able to offer premium deferrals on pension term policies or qualifying life policies (these are generally policies sold prior to 2002 that gain a value) because of the tax implications on the policies.
Our Income Protection product, launched in September 2018, already allows customers to take a career break which lets them reduce their monthly benefit to a minimum of £250 per month or their premiums to a minimum of £5 per month, for up to 12 months.
For Income Protection customers whose policies were purchased on the Life Protection Platform starting on or before 31 March 2020, we’re waiving the requirement that policies must be in force for 12 months before the career break option can be used.
How does it work?
Your clients don’t need to contact us to take advantage of this policy option. You can process the career break on their behalf by using the policy servicing capability on the adviser portal. This will change the policy to the lower level of the cover and update the premium. At the end of the 12 months the policy will revert to the original level automatically.
Your client doesn’t need to provide us with any evidence to take advantage of this option.
- Our career break option can only be used once during the life of the policy.
- Your commission won’t be affected if your client decides to use this option.
- This only applies to Income Protection policies on the Life Protection Platform.
Decreasing and increasing level of cover
Today we're introducing a new policy option whereby our Life Protection Platform customers (policy numbers with the prefix PR) can choose to decrease their sum assured for 6 months and then increase it back to the original level without the need for any underwriting.
How does it work?
If any of your clients with a Zurich Life Protection Platform policy would like to use this option, please ask them to call us on 0370 241 6945. We will discuss their financial situation, and if they are experiencing difficulties, we’ll explain the options available to them, including the option to reduce their cover for six months.
If your client decides to reduce their cover, we will refer them back to you to agree the level of reduction in cover. You can reduce the cover to any level, subject to the premium remaining at our minimum premium level or higher.
As the adviser, you’ll then be able to make the appropriate reduction using our policy servicing capability on the adviser portal. This will automatically reduce the cover and generate all the updated policy documents for the customer.
Shortly before the end of the six months we’ll contact your client to remind them that their cover will automatically increase back to the original level at the end of the period.
- At the end of the six-month period, we will recalculate the premium for the increase based on the age of the customer at the time. This means that the new premium might be slightly different, most likely higher than the premium paid before the reduction.
- The cover will remain reduced automatically for six months. Your client can increase their cover back to the original level earlier than that subject to normal underwriting.
- Your client will have the ability to opt out of the automatic increase at the end of the six months. If they decide to increase their cover later, they will need to go through underwriting.
- This option will only apply where the sum assured is decreased and then increased again and it wouldn’t apply where customers decide to remove additional benefits.
- Your commission will be affected if your client decides to decrease their cover temporarily. We will clawback commission in respect of the decrease. However, when the policy is increased again new commission will be payable on the increase amount.
- This option is not available to Income Protection policies on our Life Protection Platform – instead, they can benefit from the career break option.
We have created a customer infographic for you to use with your clients.
Download the infographic here: