The plan offers the following choice of benefits; n Death benefit n Death or earlier critical illn...
The plan offers the following choice of benefits;
n Death benefit
n Death or earlier critical illness (CI) benefit
n CI benefit
n Disability income benefit (sickness, accident and disability)
n Premium payment benefit (sickness, accident or disability)
The planholder may select as many benefits as they require all within the same plan.
Minimum acceptable age attained at commencement: 18
Maximum age attained at commencement for CI cover:
Varies depending on the benefit selected.
Minimum sum assured:
Determined by the minimum premium.
Maximum sum assured where CI cover is included:
There is no maximum sum assured for life cover or where CI cover is included as an acceleration of the life cover, however, if CI is included on a stand-alone basis the maximum sum assured is £500,000.
Guaranteed premium rates for stand-alone CI cover:
Each benefit can have a different type of rate. For example, clients may want to have a death benefit on a five-year renewable basis with guaranteed rates and a CI benefit for a 20-year fixed term with reviewable rates.
Reviewable premium rates:
Scottish Provident will not change the premium during the first five years of a client setting up a benefit. It will carry out a review of premiums on the first policy anniversary date on or after that benefit has been in force for five years and every five years thereafter.
Plans allowing a choice of interest rate assumptions:
n Decreasing benefit
A person would normally choose this to cover a capital and interest mortgage or loan, or a capital and interest business loan. The benefit will reduce over the term chosen to fit in with the loan, reducing as part of the capital is repaid each month. The amount Scottish Provident pays will be the amount of benefit left at the time the claim is made. Clients choose the interest rate they want Scottish Provident to use when it works out how the benefit is going to reduce over the term. Clients can choose an interest rate between 0% a year and 18% a year. If a claim is made, clients can then pay towards what is left of their mortgage or loan, provided interest rates have not risen above the chosen rate in the period so far.
n Automatic sum assured indexation available
The benefit will increase each year by the increase in the retail price index (RPI). However, it will not increase by more than 10% each year. The premium for that benefit will increase by the increase in the RPI multiplied by 1.4. Benefit will increase on the policy anniversary after cover starts. For benefits added or increased during the year, the first increase will apply less than a year from it starting and then each year after that. Scottish Provident will work out the increase in the RPI over the year ending three months before the policy anniversary. If the rate of inflation drops below zero, the rate will be zero.
When death or earlier CI benefit or CI benefit is selected, the life assured can select the buy back option. This option allows them to take out new CI cover when they are effectively uninsurable after having made a successful CI or total permanent disability (TPD) claim. The insured must be under age 60 when they make the claim.
With a cancer claim, the buy back can be set up 12 months after the successful treatment of the condition with no subsequent reference. This option must be taken before five years of claim. With a claim for any other cause other than cancer, buy back can be set up 12 months after the claim was accepted. This option must be taken within two years of the claim.
The buy back benefit will be for the life assured in respect of whom the claim was made and covers cancer, heart attack and stroke, which make up approximately 80% of CI claims.
Plan permits variations to sum assured other than guaranteed insurability options (GIOs):
Clients do not have to wait until a certain event happens to make changes to their plan. There are a number of changes that clients can make at any time. Scottish Provident may need to ask for medical or financial evidence to deal with some of the changes.
Premium will change when policyholders make changes to their plans. Scottish Provident will write to clients to confirm the change and their new premium. If premiums increase under their plan, the firm will pay commission to the intermediary dealing with their plan. If premiums reduce, Scottish Provident may reclaim some commission from the intermediary.
When changes are made to the plan, the premium must not fall below the following amounts:
n £5 a month (£50 for Channel Islands and Isle of Man)
n £60 a year (£600 for Channel Islands and Isle of Man)
n Increase options
If the plan has been accepted at ordinary rates, there are a number of increase options that allow an increase in the amount of benefit within certain limits. In these circumstances, the person covered only needs to sign a short declaration of continued good health. The premium covering the increase will be based on the age of the person covered and the rates that apply at the time.
The death, death or earlier CI, CI and disability income benefits can be increased by up to 50% of the original benefit amount. However, the increase cannot be for more than:
n £150,000 for lump-sum benefits
n £8,000 a year for disability income benefits; and
n An amount which when added to the original benefit amount takes the total above the maximum allowable level.
These increase options can be utilised until the person covered reaches age 55 (first life to reach 55 for joint life benefit).
Increase events for term, personal and mortgage plans only:
Mortgage increase - this option can be used when a policyholder increases their mortgage amount because of moving house or making home improvements. The increase must be for the clients' home/principal private residence and they must not currently be in arrears on their mortgage payments. Scottish Provident will limit the increase to the lower of the increase in the mortgage and the limits shown above. Scottish Provident will need a copy of the loan offer as evidence. For unemployment benefit, clients can use only the mortgage increase option to increase this benefit.
Childbirth or adoption:
Clients can increase their benefit by any amount within the limits shown above. Scottish Provident will need a copy of the birth or adoption certificate as evidence.
Clients can increase their benefit by any amount within the limits shown above. Scottish Provident will need a copy of the marriage certificate as evidence.
If a policyholder has been promoted or they move to another job and, as a result of this, their salary increases, they can increase their benefit by the percentage difference between the new and old salary. However, the increase must be at least 10%. Scottish Provident will need written confirmation from the employer or Her Majesty's Revenue and Customs as evidence. Clients cannot make an increase using this option if they are self-employed, a controlling director, or if they can decide on the amount of their salary.
Joint life separation:
Separation option (term personal and mortgage plans only) -
Clients can only take advantage of this option if they and their partner have taken out a plan on a joint-life basis to cover a mortgage.
Survival period for CI claims:
To qualify for a claim, the person covered must survive for 14 days after diagnosis with a critical illness (no deferred period for TPD).
Scottish Provident automatically includes children's CI benefit when clients choose death or earlier CI benefit or CI benefit. It will cover all children, including step-children and children that clients have legally adopted, aged between 30 days and 18 years for 50% of the main CI benefit up to a maximum of £20,000.
If both parents have separate CI benefits, children's CI cover applies to both, so clients can have cover up to £40,000. They can claim this benefit once for each of their children.
Scottish Provident will make a payment as long as the child survives for 14 days after satisfying its definition of one of the critical illnesses or disabilities.
Number of exclusions applicable to CI Cover: 1
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