The Protection Menu is a menu-based protection product that offers: n Level life cover n Level lif...
The Protection Menu is a menu-based protection product that offers:
n Level life cover
n Level life cover with accelerated critical illness (CI) cover
n Decreasing life cover
n Decreasing life cover with accelerated CI cover
n Family income cover
n Family income cover with accelerated CI cover
n Income protection (IP) cover with or without additional CI cover
The plan also aims to top up income if:
n A child is diagnosed with a listed CI, or
n The life assured is unable to work or maintain a houseperson's role due to disability, or
n The life assured becomes unemployed, or
n The life assured takes time of work to care for a sick child resulting in lost earnings
The plan is flexible enough to permit changes in the level and type of cover at any time by adding, removing or amending benefits.
Maximum age attained at commencement of insured for life cover only:
The maximum age at entry where life cover only is included is 79 attained.
Maximum age at commencement of insured for accelerated CI:
The maximum age at entry where accelerated CI is included is 59 attained.
Minimum policy term:
The minimum term is five years for all of the main benefits.
Maximum term for life cover only:
The maximum term where life cover only is included is 40 years.
Maximum term for accelerated CI cover:
The maximum term where accelerated CI cover is included is 40 years.
Maximum sum assured for life cover only:
The maximum sum assured where life cover is included is £8,000,000. Cover over £8,000,000 will be considered on an individual basis.
Maximum sum assured where accelerated CI is included:
The maximum sum assured for plans including CI is £500,000. This maximum includes any existing CI cover.
Guaranteed premium rates: Yes
Sum assured indexation in line with Retail Price Index (RPI):
If chosen, the benefit of the main cover will increase in line with the declared value of the RPI up to the maximum allowed under the plan. The benefit increase will never exceed 10%. If the RPI is not published in any month, then the most recently published value will be used instead.
An increase may be declined no more than three times during the term of the cover. If the policyholder declines to proceed with three escalation increases over the lifetime of the cover, then all benefit and premium escalation bases will be removed.
Single life plan available: Yes
Joint life first death plan available: Yes
Joint life with two times cover basis available:
Within a plan, each cover can be taken out by one single planholder, or two people as single or joint planholders.
Plan available on a life of another basis: Yes
Split trust wording available: Yes
Plans available to UK expatriates:
All lives assured must be resident and ordinarily in the UK at the start of the plan.
Monthly policy fee:
There will only be one plan fee of £2.50 a month or £25.00 per annum, regardless of how many covers are included within a single or joint life plan.
Plan allows inclusion of IP benefit:
IP cover is available within the menu and its inclusion is not dependent on any other benefits being included. The benefit can be set up on either a guaranteed premium rate or reviewable premium-rate basis.
Option to include accident sickness and unemployment cover:
Unemployment cover is available as an option for an extra cost with any main cover.
Does the plan offer the option to buy-back life cover after a claim?
The following can be added to the life with CI cover for an extra premium:
n Life buy-back option - providing that it was selected at outset, it entitles the life assured to take out a new life cover, without further underwriting, 12 months after payment of a CI (or total and permanent disability) claim
under level life and CI cover and decreasing life with CI cover. This option is only available for covers accepted at ordinary rates.
Conversion option: Not available
Option to vary term after start date other than by insurability:
The term can increased or decreased subject to a maximum overall of 40 years and underwriting. An increase in term will be processed by a recalculation of the whole benefit premium based on the then current age, outstanding term and premium rates.
Plan permits variations to sum assured other than guaranteed insurability options (GIO):
The sum assured may be increased subject to underwriting:
n Level cover - the premium will only be calculated for the increase in sum assured and will be processed as a new plan for the top-up.
n Decreasing cover - any increase will result in a recalculation of the entire benefit premium based on the then current age, outstanding term and premium rates. The change will be processed as a new plan for top-up.
Sum assured can be decreased at any time: Yes
Change lives assured after start date:
A change in the life assured configuration will (for example joint life to single life or vice versa) will result in a recalculation of the entire benefit premium based on the then current age, outstanding term and premium rates. The change will be processed by the issue of a new plan.
GIO:
If the life assured is under age 55 and has been accepted on standard rates and was in good health when the cover was originally underwritten, Royal Liver will include the following GIO. This will enable the planholder to increase the benefit amount at any time without any further underwriting on the occurrence of the following special events:
n Career change or increase in salary:
Maximum increase allowable is five times increase in basic salary or 50% of existing benefit to a maximum of £100,000.
n Marriage event/civil partnership:
Maximum increase allowable is 50% of existing benefit to a maximum of £100,000.
n Childbirth / Adoption Event:
Maximum increase allowable is 50% of existing Benefit to a maximum of £100,000.
n Mortgage event:
Purchase of a new property or increase in mortgage loan due to home improvements.
The maximum increase allowable on life cover at any one time is the lesser of:
n The increase in the mortgage loan amount
n 50% of the existing benefit
n £100,000
The option is exercised prior to the 55th birthday of the life assured or the eldest life assured if there is more than one.
Joint life separation: Yes
Total number of CI conditions covered: 31
2006 model ABI CI definitions adopted: Yes
CI definitions reviewable:
The conditions covered cannot be amended by the provider after commencement of the policy.
Number of CI conditions as defined by the ABI: 23Analyst's commentThe Protection Menu from 'virtual insurer' Progress at Royal Liver has proved a great success with independent distributors. Not only does it offer a solid product, it provides a seamless end-to-end, online-only, process.
More progress has recently been made with the addition of guaranteed premium rates for critical illness (CI) and the early adoption of the new Association of British Insurers (ABI) model wordings for CI.
It will be disappointing if the ABI move the goalposts again and amend cancer definitions after Swiss Re's latest spanner in the works.
While the inclusion of guaranteed rates will undoubtedly appeal to many advisers, introducing the new model wordings demonstrates a continuing vigour from Royal Liver to lead the market. It is particularly pleasing that along with these changes it has taken the opportunity to assist advisers in understanding the impact of the new definitions.
The 'Protection Menu', includes a comprehensive range of benefits including life and CI. The policy offers flexibility through indexation, a range of guaranteed insurability options as well as allowing underwritten variations to cover.
Income protection (IP) and unemployment cover are also offered as options within the menu providing a one-stop protection plan. As part of this review, the previous option to include CI with IP has been removed.
The unfortunate thing is that access to the 'Protection Menu' is restricted to selected distribution partners, consequently, those who fall outside of this group will be unable to benefit from the many positives offered by the plan.
Nick Telfer, head of life and protection, Defaqto
