Changes to Unum income replacement

Unum has increased the proportion of a client\'s income that can be covered using its Executive Income Replacement Plan. It says it has made the move in response to the government\'s introduction of Employment and Support Allowance which replaced State Incapacity Benefit for new claimants from 27th October.

Previously the plan allowed small businesses to cover up to 75 per cent of gross earnings for an individual employee, less the Long Term State Incapacity Benefit for a single person.

Following the introduction of the new Employment and Support Allowance, Unum is increasing this maximum percentage to 80 per cent of gross earnings and is not be taking into account any State benefits relating to incapacity.

Linton Penman, head of retail marketing at Unum, says: “The Executive Income Replacement Plan allows Unum to help those smaller employers who wish to cover only the earnings of a specific individual as part of their overall remuneration package. The product may even provide a tax efficient alternative to traditional income protection for those businesses which are essentially one man limited companies. Unum currently offers a maximum annual cover of £200,000. The changes announced today will allow more clients to benefit from the high level of cover that we can offer by potentially covering a greater proportion of earnings for employees with annual incomes of up to £250,000”.