Royal London has paid an income protection claim to a customer who became unable to work while their application was still being underwritten and before their first premium had been collected.
The customer received £1,500 through the insurer’s fracture cover benefit, alongside £525.21 in income protection payments after a fractured foot left them unable to work for a short period.
The claim was paid because the customer was covered by Royal London’s free cover proposition from the point at which the provider received their completed application, despite the policy not yet being formally in force.
Royal London said the case illustrated how temporary protection during underwriting can provide financial support before a policy has completed the application process.
The insurer has paid 26 claims under its free cover arrangements since 2015, with payments totalling £2.5 million. These have included life insurance, critical illness and income protection claims arising before policies formally went on risk.
The case has been highlighted ahead of Income Protection Action Week, with Royal London encouraging advisers to discuss with clients the protection that may be available while applications are being assessed.
MAKING A DIFFERENCE
Craig Paterson, chief underwriter at Royal London, said: “When people apply for protection, they’re often focused on the cover they’ll have in place in the future. But illness or injury doesn’t wait for an underwriting decision.
“In this case, a customer was unable to work while their application was still being assessed. Because free cover was already in place, we were able to provide financial support when it was needed.
“It’s a feature that can be easily overlooked, but it can make a real difference. These are the moments that show why having protection from day one matters and why advisers should make clients aware of the cover available during the application process.
“Over the last decade we’ve paid £2.5 million through free cover, supporting customers and their families at some of the most difficult moments in their lives. It demonstrates that protection can provide value from the moment an application is submitted, not just once a policy is formally in force.”
“For any advisers who don’t talk about free cover, you definitely should.”
Gilbert Boadu, from Wealthmax Financial Advisers Limited, whose client received the payment, said: “When I talk to clients about IP, the focus is often on what happens months or years down the line if they’re unable to work.
“This case was a powerful reminder that injury doesn’t wait for a policy to be issued and whilst I’ve spoken about Royal London’s free cover many times,
“I was delighted to see it turn from conversation to action when it counted. For any advisers who don’t talk about free cover, you definitely should.”
Vicky Churcher, executive director at IPTF, added: “Cases like this matter because they show income protection working exactly as intended, providing practical financial support when it’s needed most.
“As we approach Income Protection Action Week (IPAW), we’d encourage advisers to use examples like this to start conversations with clients about the full scope of protection available to them, including the safeguards that can apply during the application process itself.”
Royal London’s free cover starts when it receives a completed application and direct debit instruction, subject to its eligibility criteria.
The arrangement can also apply when existing customers seek to increase or amend their cover. Where a valid claim is made, eligible customers may be covered for the level of protection requested even before the amended policy has been formally accepted.
Free cover is available through Royal London’s Personal Menu, Business Menu, Relevant Life and Pegasus Whole of Life plans at no additional cost while an eligible application is being assessed.
