The COVID 19 coronavirus pandemic has led to a number of changes in our market which we have had to respond to as quickly and carefully as possible. One of the Society’s values is that members are at the heart of all we do, so all the decisions we make are to protect the interests of our members.

There has been an increase in demand for Income Protection cover in recent weeks. Whilst a positive of this crisis is that consumers are more aware of their financial vulnerability, this also comes with its challenges. Advisers have talked to us about clients who are solely looking to take out cover because of coronavirus, who could then lapse their cover as soon as things get back to normal. While this short term rush of new applications might look appealing, this would be an inefficient use of resources for both you and us. We’ve also had to assess the financial impact coronavirus related claims could have on our Society, and as a result took the difficult decision to apply a coronavirus exclusion to anyone applying after the 13^th March.

We do not reinsure any of our Protect and Breathing Space risk and that has allowed us to be creative in finding ways to provide cover to the often underserved section of the market. That does mean though that unlike other insurers, we have to manage the full risk of new Protect and Breathing Space applicants ourselves without the financial support of a large reinsurer.

We’ve now had to make an even tougher decision and that is to remove our Day 1 and Week 1 deferment periods until further notice. Other insurers recently withdrawing from these short term deferment options has left us very exposed, and given the current climate, it would not be prudent or fair to our current membership to continue offering these options. It’s an unfortunate situation as we know how valuable these short term deferment options are. This decision will be under regular review.

This decision will apply to new applicants from 5pm tonight. Anyone who has applied to us before then will be able to proceed with their application with the deferment period they selected.

Please be aware that whilst we are removing the Day 1 and Week 1 options from our application system from tonight, it may take up to 48-72 hours for the portals to update their systems. Please ensure you do not provide your clients any quotes with these deferment periods as we will not be able to honour any Day 1 or Week 1 quotes for anyone who has not submitted an application before our system is updated tonight.

Some more information about how this decision will affect new applicants before they start their policy is below.

I appreciate this will cause some difficulties but I hope you can appreciate why we have had to take this course of action.