"By making these changes, we aim to help advisers work with their clients to keep some cover in place rather than cancelling their policy outright."
Aviva has launched a cost-of-living support scheme for existing individual protection customers who may be strugging financially.
The scheme will operate alongside the payment deferral scheme that was put in place during Covid-19 for customers experiencing short-term financial difficulty. The new scheme has been introduced to help customers with longer term money worries keep some valuable protection cover in place over the next few years by reducing the sum assured on their policy to make their premiums more manageable.
Customers will be able to buy a top-up policy to bring their cover back up to a maximum of the previous level after one or two years when their finances are back on track.
Aviva is currently communicating with protection advisers to outline how the scheme will work.
Advisers will be able to notify Aviva about any customers who require this support and provide advice on their options. Customers who contact Aviva directly to discuss their money worries will be prompted to speak to their adviser before making a decision. Where they choose to proceed without advice, Aviva will contact the adviser, with the customer’s consent, to inform them of the change and keep them copied into relevant future customer correspondence.
Aviva will send communication 'nudges' to customers and their advisers after one year and again after two years, to remind them of the opportunity to bring their cover back up to a maximum of its previous level.
Customers can apply to buy more cover at any other point, or extend it beyond the original cover level, by going through Aviva's standard application process.
Aviva’s existing payment deferral support remains in place for all customers, based upon their circumstances, irrespective of their policy type.
Encouringly, Aviva says it is currently not seeing any material increase in policy lapses, but by offering both support schemes, Aviva aims to help as many customers as possible to maintain some cover at a time when they may need it most.
Fran Bruce, managing director of protection at Aviva, said: “We recognise that the cost of living is very difficult for people and it is unclear when things will improve, so alongside our short-term assistance, we have expanded the options to increase flexibility and address customers’ future needs, as well as highlighting the importance of advice in the process.
“We know when times are tough for customers, they are tough for advisers, so we have expanded the support and tools available on Connect to make managing existing customers’ policies easier for them. By making these changes, we aim to help advisers work with their clients to keep some cover in place rather than cancelling their policy outright.
“If financial pressures ease in a year or two, we’ll provide a simple route to return the protection cover back up to a maximum of the customer’s previous level.”