Introduction to LV= (Liverpool Victoria)
LV= (Liverpool Victoria) is a UK-based financial services provider founded in 1843 with some 1.28 million customers. They provide protection, savings and retirement products and have around 1,500 employees. Importantly, LV= believes that everyone should have access to independent financial advice, and it shouldn't be seen as a luxury reserved for the few. As such, LV= works with many financial advisers, and it's through them that the majority of their customers will buy their products. It would be fair to say that LV= is considered a leading income protection provider in the UK.
At the time of writing, LV= has amassed a staggering 49,000 reviews on Trustpilot, of which 95% are either four or five pretty extraordinary stars, given the range of financial services they provide. The excellent reviews they receive from their customers is, in our opinion, the most significant indication of the quality of service they provide.
Looking more closely at LV= Income Protection, you'll be pleased to hear that they've received a five-star Defaqto rating for 2021 for both their Flexible Protection Plan and their Budget alternative, with their Personal Sick Pay products scoring four stars apiece. This high-level validation from the experts at Defaqto should again serve as reassurance that not only does the company provide high levels of customer service, but their products are up to scratch too.
Finally, it'd be fair to say that LV= has received its fair share of industry awards, again validating its position as a leader in the income protection market. Most relevant would be that they have received the Money Facts award for Best Income Protection Provider 11 times between 2010-2020.
Life isn't always predictable, thus the need for protection
Income protection is a type of insurance policy that pays out a monthly benefit if you're unable to work due to sickness or an accident. While it won't cover your entire salary, personal income protection policies will usually cover up to 60% of your income. When you're setting up your policy, you'll get several choices to consider, such as:
- How much of your income you'd like to cover.
- How soon you would like the policy to start paying out if you can't work (deferral period).
- The length of the policy, with some offering short-term cover and others protecting you up to retirement.
- The insurer's definition of "incapacity" has a significant bearing on coverage.
- Whether you have Guaranteed or Reviewable premiums.
We'll come back to some of these points when looking at LV='s offering a bit later in this guide, but as you can see, there are a few considerations you should bear in mind and of course, it always pays to make a market comparison before you buy too.
Did you know, if you're a business owner, freelancer or company director, you might be able to take out income protection through your business? Click here to learn more about income protection for business owners.
As we've explained, LV= income protection covers you if you're unable to work due to sickness or injury, paying you a regular income until you're fit enough to return to work.
The policy won't cover redundancy; however, if you lose your job due to no fault of your own, you may be able to claim for LV= to waive your premiums for six months, meaning you get cover while looking for your next role.
Unlike other types of insurance, such as critical illness cover, there isn't a specific list of conditions and injuries that you can claim for, so you can claim for any sickness or injury that prevents you from working for a prolonged period.
What can the payments help with?
The idea with income protection cover is that the monthly benefit will help you pay for essential expenses while you're off work; these could include:
- Your mortgage or rent payments
- Utilities and bills
- Weekly food shops
- Childcare costs
- Travel and transport costs
- Pocket money and leisure costs
- Other living costs
Ultimately, it's there to replace part of your salary so that you can keep your head above water and concentrate on getting better as quickly as possible.
OK, so by this point, you'll know that LV= income protection will pay an ongoing benefit if you can't work due to sickness or an accident, but what exactly is included and what are the features of the policy?
Cover for up to 60% of your income
LV='s income protection insurance will cover up to 60% on a personal plan of your annual income before tax maximum benefit of £12,500 per month. If you own a limited company, your payment can also include dividends from that business as long as the dividend income is related to your work activities and is a regular pattern rather than a one-off payment. Again, if you're a company director, your income can also include any dividends paid to your spouse or civil partner as long as they are a shareholder in the business and don't take things over when you stop working.
Level Cover throughout the life of the policy
Assuming you don't opt for Inflation Linking, the amount of cover you choose is fixed (Level Cover) from when your policy starts. One thing to bear in mind is that because the policy won't keep up with inflation, your payments won't go as far in the future.
Choice of premium type
Choose between Guaranteed Premiums, which remain the same throughout the life of the policy, or Reviewable Premiums, which give the insurer freedom to change the monthly premiums over time. While policies with Guaranteed Premiums will usually cost more initially, over the life of a 20 or 30-year policy, they tend to be cheaper than Reviewable. This is especially the case for younger people that can access very low fixed rate premiums from the outset. It should be noted, however, with LV=, their Reviewable premiums won't change in the first five years of the policy, but after that, they could change every year.
Own Occupation definition of incapacity
The definition of incapacity the insurer uses for their income protection policies is critical, as it effectively determines how long they will payout for and when they determine you are fit enough to work again. Own Occupation is the best definition of incapacity you can get as it pays out if you're unable to do the main tasks of your usual Occupation.
Comprehensive and low-cost budget income protection options
LV='s comprehensive policy will pay out without limit right up until your chosen retirement age, so if you can't go back to your Occupation, you'll be taken care of. The only difference between their comprehensive and Budget version is that the latter will only payout for a maximum of 12 or 24 months per claim.
Choice of waiting period (deferred period)
The longer you can wait before needing your income protection policy to start paying out, the lower your premiums will be. LV= offers several options in this regard; 1, 2, 3, 6 or 12 months, however, the one and two-month options aren't available to a small number of occupations. When choosing your waiting period, it's essential to consider your level of savings and how much employer’s sick pay you're entitled to.
Waiver of Premium is included as standard
Waiver of monthly premium is an additional layer of protection that effectively will cover the cost of your income protection policy premiums if you're unable to work due to sickness or injury. What this means is the ongoing cost of your income protection policy won't be deducted from any payout in the event of a claim.
Optional Inflation-linked cover
LV= allows you to link your income protection policy to inflation so that the amount you're covered for will increase each year, with inflation multiplied by 1.5 (based on the Retail Prices Index). This inflation-linked cover is optional but worth considering, especially if your policy covers you until retirement.
In addition to the core cover, LV= income protection offers many supplementary benefits:
- Fracture Cover - receive up to £2,200 (how much depends on the fracture) as a one-off lump sum payment if you're diagnosed with a specified bone fracture. The injury doesn't have to prevent you from working either, making LV=’s Fracture Cover an excellent freebie on your policy.
- Death Benefit - if you die before the end of your income protection policy, LV= will pay a fixed lump sum death benefit up to a maximum cover of £10,000 (£5,000 in the first four years of the policy), a bit like a small life insurance policy.
- Involuntary unemployment waiver of premiums - if you become unemployed through no fault of your own, LV= will waive your income protection premiums for up to six months, meaning you'll still be covered while you're arranging your subsequent employment.
- Parent and child cover - LV= will pay a lump sum equal to 6 times your monthly cover (up to a maximum of £25,000) if your child is diagnosed with a specified illness or requires a specified operation.
- £1,500 Benefit Guarantee - it may be that when you come to make a claim, your income is less than what it was when you took out the policy, meaning your cover could be higher than the 60% maximum associated with the policy. If that's the case, LV= will reduce your payments, but guarantee not to reduce them below £1,500, subject to various supplementary terms.
- Help to get back to work sooner - whether you have a long waiting period or not, in the event you're unable to work, you should notify LV= as quickly as possible, as in some cases, and assuming they think it will help your recovery, they'll arrange for treatments and services for you. You don't need to have claimed to access this service.
If you're registered with the General Medical Council and licensed to practice in the UK, you'll be eligible for some special conditions reserved for doctors and surgeons with your LV= income protection policy.
£3,000 Income Protection Benefit Guarantee
If you're a doctor or surgeon, rather than entitlement to the standard £1,500 Benefit Guarantee on your income protection policy, it's increased to £3,000. So if your income drops significantly, the minimum LV= will payout is £3,000 per month.
Sabbatical break cover
Again, assuming you're a doctor or surgeon (and meet some criteria), you can take a sabbatical break from work for up to 2 years, and your policy will continue as if you were at work. If you suffer an injury or illness during the sabbatical, they'll base your claim on the income you received in the 12 months before you took your break.
LV= include within their income protection insurance a "Teachers sick pay guarantee" that applies if you're a teacher and your sick pay matches one of the following:
- The Conditions of Service for School Teachers in England and Wales (sometimes referred to as the 'Burgundy Book')
- The Department of Education, Teachers Terms and Conditions for Northern Ireland.
- The Scottish Negotiating Committee for Teachers (SNCT) handbook of Conditions of Service for School
Under this guarantee, LV= will start paying you as early as possible (alongside your sick pay) depending on how long you've been employed as a teacher. In addition, they won't deduct your sick payment when they work out the maximum monthly amount you can claim, but they will take into account any continuing income you may be receiving.
How to make an income protection claim
In the event that you need to claim under your LV= income protection policy, you can call 0800 756 5869; their lines are open Monday to Friday from 08:30 to 18:30. Alternatively, you can email healthclaims@lv.com or write to them at:
Health claims LV=
Emperor House
Grenadier Road
Exeter Business Park
Exeter
EX1 3LH
Business Protection Hub provides independent information about a range of financial services products from life insurance to medical cover. We work exclusively with the team at Sandbourne, who can provide expert advice to our customers on a range of products.
Own a business? Be sure to check out these guides:
- Director's life insurance
- Income protection for business owners
- How to save money with Relevant Life Insurance
Frequently asked questions
Who is LV=?
LV= are a UK-based financial services provider with over 1,500 employees and 1.28 million customers. They provide protection, savings and retirement products, primarily through a network of independent financial advisers.
What does LV= income protection cover?
LV= income protection will pay out a monthly benefit if you're unable to work due to sickness or injury. However, it won't cover you for loss of income due to unemployment or redundancy.
How much does LV= income protection cost?
The cost of LV= income protection policies varies significantly depending on your age, occupation and level of cover. It's always best to speak to an independent IFA and compare the market to ensure that the policy you're looking at provides you with the best cover and the most competitive price.
What isn't covered by LV= income protection cover?
Typically, pre-existing conditions and unemployment due to anything other than sickness or injury won't be covered. Still, you should refer to your policy terms and conditions for a complete list of specific exclusions.
