Increasing cover policies, otherwise known as indexation policies, gives borrowers the option to increase their premiums in line with inflation.
L&G calculates the premium increases by multiplying the Retail Prices Index (RPI) by 1.5, subject to a maximum increase of 15% per year.
The change, in response to adviser feedback, means existing customers will ensure that policyholders have more flexibility in their protection cover and this will offer “greater choice and value”.
Policyholders coming up to their policy anniversary from 1 January 2024 will be offered the option to decline an increase in cover but will retain the ability to increase cover in future years.
The change is being applied to life insurance, critical illness cover, whole-of-life protection plans and income protection policies.
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Pippa Keefe, commercial director for retail protection at L&G, said: “This enhanced flexibility, which was offered to new customers in April, ensures that existing customers will also benefit from more flexible, future-proof protection that evolves with their needs. The enhancement also demonstrates our ongoing commitment to listening to valuable feedback from our network and delivering positive outcomes for advisers and their clients for both new and existing policies.”
