"Indexation is an important option for clients to consider, especially as inflation has started to rise significantly."
For advisers, VitalityLife is offering two months of free cover plus up to £225 additional cashback on all indexed policies when they take out their own indexed policy. It’s available on all indexed policies that come with Wellness Optimiser, Vitality Optimiser, Interest Rate Optimiser or Premium Rate Optimiser.
For clients, VitalityLife is offering up to two months of free cover - one month free in the first year and another month free if silver status or above is reached in the first year. It’s available on all indexed policies that come with Wellness Optimiser, Vitality Optimiser, Interest Rate Optimiser or Premium Rate Optimiser.
The UK's inflation rate rose in April to its highest since September 2013. Inflation now stands at 2.7% - up from 2.3% in March - and above the Bank of England's 2% target. The Bank of England has warned that inflation as measured by CPI will peak at just below 3% this year.
As a result, VitalityLife has also upgraded the way indexation is sold. Policies with indexation will have lower initial premiums than level policies. Before policy anniversaries, clients are invited to increase their cover and, if they do so, the cover and premium increase from their anniversary.
This increase in cover levels can be declined at any time, but after three consecutive declines indexation is removed and the cover converts to level with no premium impact.
Tom Conner, Director at Drewberry, said: “Indexation is an important option for clients to consider, especially as inflation has started to rise significantly. Inflation erodes the value of any pay out over time so it’s often sensible to make sure the value of a policy keeps track with inflation. These initiatives will hopefully give people another reason to index-link their protection policies, where appropriate.”
Justin Taurog, Managing Director Sales & Distribution at VitalityLife, commented: “We believe these changes to encourage take-up of indexation are the right thing to do at the right time, so that the value of protection policies are themselves protected. We want to make sure we are giving advisers every opportunity to inflation-proof both their clients’ and their own protection policies.”
