The full launch of the product, designed for people aged between 17 and 45, direct to consumers or through corporate partners is expected in the coming months.
Mark Jones, LV= head of protection, said: “We know there is a huge gap in the number of people that have their income protected when it is one of the most important and relevant things for people to insure.
“We want to help raise the profile of the need for people to protect their income with a simple, quality and good value proposition. Our aim is for Sick Pay Insurance to sit very much in the retail space and feel similar to buying something from a major online retailer.”
People are able to buy comprehensive cover accompanied by short and simple literature with no medical questioning.
Apart from five occupations people can be covered against not being able to do their own job – the easiest occupation definition to claim on.
The cost of cover is the same for everyone and the amount of cover people can take out is based on the number of hours they work.
Customers can be confident that when they claim they will receive the cover they have paid for as no existing sick pay, insurance pay-outs, or any state benefits are taken into account.
LV= says a claim would never be reduced by LV= because of over-insurance as long as the person covered was still working at least the number of hours their cover was based on.
Customers can choose a fixed amount of cover between £500 and £1000 per month and Sick Pay Insurance can be set up online within a few minutes.
Once someone has been unable to work for four weeks Sick Pay Insurance can pay out for up to a total of 12 months and multiple claims can be made even for the same condition.
Apart from medical conditions the customer has suffered in the last two years there aren’t any types of accident or sickness that won’t be paid out for.
Cover automatically runs until age 70 and premiums are guaranteed for the first five years. LV= cannot cancel the policy or change the terms or conditions of the cover in place at any time.
Sick Pay Insurance is aimed at those who do not traditionally seek financial advice and are therefore unlikely to take out income protection.
Jones said: “We’ve spent a lot of time making the buying process clear and simple. This includes interactive questions to help people understand what they are covered for and transparent examples of when a claim can and cannot be made.”