British Friendly policyholders will have the option to reduce their benefit level for a maximum of three months to help alleviate financial difficulties.
The benefit reduction option enables policyholders to temporarily reduce premiums, while maintaining a degree of cover. The option is available to those who have paid at least three months’ premiums.
Cover will revert automatically to the policyholder’s original benefit amount when the reduction option ends, without further underwriting required.
The initiative comes after the provider temporarily changed its premium holiday rules in March for existing customers with potential difficulties with paying premiums, by reducing the qualifying period of premiums paid from one year to a month.
The qualifying period for a premium holiday has been revised from one to three months of paid premiums, as of yesterday (July 1). According to the provider, this was to “align” the benefit reduction and premium holiday options and “keep it simpler for clients”.
Policyholders who suspend their cover by taking a premium holiday will be able to maintain access to health and wellbeing services, such as virtual GP consultations and counselling, through the insurer’s discretionary loyalty programme, ‘Mutual Benefits’ until the end of the year.
Emma Thomson, product strategist at British Friendly, said: “Helping members who are experiencing financial difficulties is a priority for us. We want to give our members alternatives to simply cancelling their policies because they can no longer afford them.
“This new initiative provides specific help to those who need to reduce their outgoings in the short-term whilst still enabling them to claim if they need to.”
Alan Knowles, managing director at Cura and chairman of the Protection Distributors Group, said: “We’re pleased British Friendly is taking this sensible and practical step. This new benefit reduction option will help to keep clients on-risk when they may be experiencing financial hardship. It is the right thing to do”.
chloe.cheung@ft.com
