Protection menus which offer customers opportunity to pick ‘n mix health and life cover in a single comprehensive policy have been around for over two decades. Unfortunately the original versions did not prove to be very attractive to customers although the concept was right. Direct debit, a single set of paperwork and administrative savings were welcomed by both the insurer and the consumer. However the benefits offered by these menus were outweighed by the drawbacks.



The range of products offered by the main pioneers, Pegasus and Lincoln National, were not competitive. Independent financial advisers (IFAs) shopped around leading providers to create protective packages for the clients, which significantly undercut the rates found in protection menus. The market has now moved on and an avalanche of new protection menus have been launched which have gained the approval of many intermediaries.

Scottish Provident was the first to develop a winning formula when it re-launched it's Self Assurance menu. They were soon followed by Legal and General, Liverpool Victoria Life, Friends Provident, Skandia Life, Scottish Equitable Protect and others are expected to follow their lead shortly.

Three basic elements are found in most protection menus. Critical illness cover lists a number of stated critical conditions for which it will pay out a lump sum. The least expensive option, term assurance, pays out a lump sum if you die within a given period and nothing thereafter. Lastly there is income protection, which pays you a regular income if long term disability or illness prevents you from working. The menu may offer you redundancy cover, which is normally limited to 12 or 24 months and can also be restricted to the payment of a mortgage. The principle attraction is the flexibility of the products. For example different levels of cover can be arranged for separate component parts, so if you make a claim on one part the others will still remain in force. No further medical evidence will be required before major life style events, like moving house, having a baby or becoming married. These additional benefits are known as ‘Guaranteed Insurability Options'.

Different components of cover may be added following the completion of a short questionnaire and you will still benefit from the standard policy discounts.

An example of the benefits derived from a protection menu is illustrated by a young couple who chose Legal and General's Protection Choices menu for mortgage protection. They are paying a combined premium of £31.07 a month for separate critical illnesses and life policies, which have been written on a joint life basis. Initially they have cover of £109,750 which reduces as their 25 year mortgage is paid off. Life cover will be paid out if one of them dies and the policy is terminated, but the survivor will still benefit from critical illness cover. Life cover will be maintained for both of them even if one becomes ill and the policy will pay out on whoever dies first.

If the couple had signed up for a standard joint life policy with Legal and General they would only receive a pay out on their first claim. Whereas with their Protection Choices policy they are offered two possible pay outs costing only £7.00 more. Although employees are sometimes offered income protection at work they may also wish to cover their mortgage in a similar way. In addition they may want to take out further critical illness and life cover not linked to their mortgage. Legal and General's protection menu enables them to do so in a cost effective and straightforward way. The new menu based products enable you to save pounds although you can shop around for individual policies and only save pence.