The plan aims to provide a regular income if a policyholder is unable to work due to illness or inju...
The plan aims to provide a regular income if a policyholder is unable to work due to illness or injury, resulting in a loss of earnings. It will also provide a reduced replacement income in proportion to loss of earnings if they are only able to take a part-time or lower paid job.
The plan offers the choice between guaranteed and annually reviewable premiums, together with optional indexation.
Maximum age at entry: 59
Maximum annual benefit available:
The benefit must not exceed 50% of pre-incapacity earnings or £175,000 per year. Cover then increases annually with inflation to a maximum of £350,000.
Option for benefits to be paid for a limited period:
Limited benefit periods of two, three or five years are available or the plan can be written to retirement.
Vary the retirement age after start date - other than guaranteed insurability option (GIO):
The term of the plan may be amended, subject to premium alteration and underwriting.
Vary benefit subject to underwriting:
The sum insured may be amended, subject to premium alteration and underwriting.
GIOs available: Yes
Option to increase benefits: Yes
Plan available without indexation:
The plan is available with level benefits when indexation has not been chosen.
Automatic increases to benefit payments:
At the start of the plan, the policyholder may choose for the benefit to increase each year from the anniversary of the date on which any claim becomes payable. The policyholder can ask for the benefit to increase by 5% each year, or in line with the Retail Price Index (up to a maximum of 12% a year). The benefit will increase at the end of each year that benefit has been paid. When claim payments stop, the cover and premium will revert to what they were before the claim was accepted.
Executive cover plan available:
It is possible for an individual plan to be taken out by an employer to cover an important employee. Basic benefits are 75% of the employee's pre-incapacity earnings, less single employee's long-term incapacity benefits, up to £175,000 per annum. In addition, it is possible to cover the employer's pension, life assurance and National Insurance (NI) contributions on behalf of the employee.
n For approved pension and life assurance schemes, insurance up to £50,000 or one third of salary, whichever is lower
n For NI contributions, insurance of the actual amount up to a maximum of £50,000.
In the event of a claim only the basic benefits can be paid to the employee, and benefits are paid to the employer who makes the corresponding payments to the employee through the Pay As You Earn (PAYE) system. NI contributions are payable in the event of incapacity.
Guaranteed premium rates available: Yes
Reviewable premium rates: Yes
Career Break available: Yes
What happens if the life assured stops working?
There are two options:
n Freedom to suspend cover and premiums: The premiums can be suspended at any time for up to a year - for example, during a career break. The life assured will not be entitled to benefit should they become ill or injured during this period.
n Cover while not in occupation: Alternatively, the plan can continue cover for up to five years with benefits based on the ability of the life assured to satisfy the physical and mental health tests described for Essential Abilities Cover (EAC). The premium payments would be reduced during this period.
In either case, the policyholder will need to let UnumProvident know, in writing, when they want to do this. Cover will resume without the need for a new assessment of the life assured's health, occupation or paying missed premiums.
Houseperson cover available:
The plan provides cover while not in paid occupation, which reverts to housepersons' cover. The definition of disability changes to that defined within UnumProvident's EAC.
Maximum housepersons benefit:
The maximum payable will be the benefit under the policy before the option was exercised up to £175,000.
Proportionate benefit available: Yes
Rehabilitation benefit available: Yes
Claiming again after returning to work:
There is no limit to the number of claims a policyholder can make, unless the chosen cover provides for a specific number of benefit payments.
Total permanent disability benefit available: Yes
Disability Plus:
The Disability Plus option can be selected at the start of the plan. This provides 20% more benefit after the insured has been receiving benefit for two years and their illness or injury prevents them from doing activities that they have to perform in their working and daily life. The maximum benefit rule (limiting claim payments to 50% of pre-incapacity earnings) would no longer apply in these circumstances.
Disability counsellors used:
During a claim, UnumProvident's rehabilitation co-ordinators provide support and assistance. They are health professionals who provide advice about benefit entitlement and return to work.
Death benefit available: Yes
Maximum percent of income insurable:
The benefit stated in the policy must not exceed 50% of pre-incapacity earnings or £175,000 per year. This includes the taxable value of benefits in kind that would cease in the event of incapacity, that the life assured specifically selects at the start of the policy and where they have a P11D tax charge. The benefits in kind UnumProvident is prepared to insure are:
n Living accommodation: The sole residence of the life insured where they are registered to pay Council Tax.
n Company car: One car is provided for private use of the life insured.
n Fuel: Where the life insured has a fully-expensed company car for private use and company car conditions have been satisfied.
n Beneficial loans: All loans provided to the life insured except those used to purchase work-related items, such as travel season tickets.
n Medical Insurance: Where cover ceases on incapacity.
State benefits deducted from benefit amount: No
Change of Occupation:
After the plan starts a policyholder does not need to tell Unum-Provident if they change the type of work they do, unless they are claiming benefit.
Own occupation definition of disability: The extent of incapacity
UnumProvident's usual definition of incapacity is that the claimants are unable, by reason of illness or injury, to perform the material and substantial duties of their occupation. Such duties are those which cannot reasonably be left out or changed by them or their employer.
Own occupation definition of disability throughout claim:
If the own occupation definition is applicable at the start of the claim then this definition will continue throughout the claim.
Any suited definition of disability:
Where UnumProvident is unable to provide cover based on the own occupation definition it may apply another definition, which is 'you are unable to perform the material and substantial duties of your occupation and any other occupation for which you are suited by reason of education, training or experience'. UnumProvident will write to the policyholder, before the start of the plan, to tell them if a different definition applies.
Definition of disability linked to activities of daily living:
An 'activities of daily living' (ADL) definition is used if the policyholder wishes to retain the contract while they are out of work. The ADL definitions used are based on the policyholder's ability to carry out specified physical tasks, or in cases of severe mental illness. In addition Disability Plus can be selected.
Deferred periods:
Periods of four, eight, 13, 26 and 52 weeks are available.
