The policy offers a variety of benefits and options from which the life assured can choose those ite...
The policy offers a variety of benefits and options from which the life assured can choose those items that meet their personal protection needs. Changes to the policy can be made as and when needed.
Main benefits:
• Life protection (guaranteed or reviewable)
• Critical illness (CI) protection (reviewable)
• Life with CI protection (reviewable and guaranteed)
• Family income benefit (guaranteed or reviewable)
• Family income benefit CI protection (reviewable)
• Family income benefit life with CI protection (reviewable)
• Lifetime protection (current costed)
• Gift inter vivos (guaranteed)
• Income protection (IP) (guaranteed or reviewable)
Benefits automatically include:
• Guaranteed insurability options
• Children's CI protection
• Immediate acceptance facility
• Income option
• Terminal illness benefit
Additional benefits:
• Waiver of premium (WOP)
• Renewal option (five- or 10-year)
• Indexation option
• Legislation option
• Life buyback option
• Total and permanent disability benefit
The life assured can choose any number of the following main benefits within the same policy. They can even have the same benefit more than once. If they choose more than one main benefit their premium will include a discount.
Maximum expiry age for accelerated CI cover:
The maximum age at expiry for accelerated CI with guaranteed rates is 64 attained. The maximum age at expiry for accelerated CI with reviewable rates is 84 attained.
Maximum term for accelerated CI cover (reviewable rates):
25 years.
Maximum term for accelerated CI cover (guaranteed rates):
50 years.
Maximum sum assured where accelerated CI is included:
Where CI is added the maximum sum assured is £500,000.
CI cover as a % of life cover:
Accelerated CI benefit is always 100% of the associated life cover.
Additional CI benefit:
CI benefit is available on a standalone basis as part of the menu of options.
Guaranteed premium rates:
Life protection, family income benefit, life with CI protection and IP can be selected on either a guaranteed or a reviewable premium basis. If the renewal option is chosen, premiums are guaranteed for the chosen term (five or 10 years). If the benefit is renewed for a further period, premium rates will be based on the life assured's age(s) at the time of renewal.
Reviewable premium rates:
The premium payable will stay the same for the first five years, at which point the insurer will review it and will continue to review it every five years after that.
Renewable rate option under the plan:
Renewal option (five or 10 years).
Automatic sum assured indexation available:
The benefit and premium will increase each year in line with the increase in the Retail Price Index (RPI), subject to a maximum of 10%.
Basis on which indexation increases are costed (for example, age attained/outset):
The benefit amount and premiums escalate at the same percentage rate if indexation is chosen. So increases are based upon the life assured's age at outset.
Joint life with two times cover basis available:
The lives assured can have any combination of cover required and could arrange the plan on a two times cover basis, as this is a menu contract.
WOP available:
The contract allows additional benefits such as WOP to be added at any time. It can be arranged on both lives.
Deferred period:
The life assured can choose the deferred period required when they take out the benefit. The deferred period starts from the date of incapacity. The deferred period options are: four weeks, eight weeks, 13 weeks, 26 weeks and 52 weeks.
Age waiver cover ceases:
The benefit will end on the day before the plan anniversary prior to the life assured's 65th birthday, or the end of the benefit term, if earlier.
Default waiver definition of disability:
The 'own occupation' definition is available as the default WOP definition. When the life assured takes the benefit out they choose from the following definitions of disability:
• Own occupation
• Any suited occupation
• Activities of daily work
Depending on the life assured's circumstances, Aegon Scottish Equitable may only be able to offer the 'any suited occupation' or 'activities of daily work' definitions. Aegon Scottish Equitable will let the life assured know when they apply which definition they can have.
If the life assured is not in paid employment at the time the disability is diagnosed, Aegon Scottish Equitable will apply the 'activities of daily work' definition, even if one of the other definitions was originally chosen.
Plan allows inclusion of IP benefit: Yes
Accident sickness and unemployment: No
Buy-back life cover after a claim: No
Buy-back CI cover after a claim: No
Conversion option available: No
Option to vary plan after start date other than by insurability:
The contract has been designed to enable the life assured to make the necessary changes to the protection benefits as and when their needs change. In addition to the guaranteed insurability options, the following changes can be made at any time:
• increase the benefit amount
• reduce the benefit amount
• extend the benefit term
• reduce the benefit term
• add a main benefit
• remove a main benefit
• add an additional benefit
• remove an additional benefit
• add a life assured
• remove a life assured
• change the payment frequency
• change the deferred period
• change the definition of disability/incapacity
Guaranteed insurability option:
This option will apply only in the event that the life assured has been accepted at ordinary rates.
Children's benefit:
If the child is diagnosed with one of the conditions listed and lives beyond the 14-day survival period, Aegon Scottish Equitable will pay 50% of the benefit amount at the time of the claim, up to a maximum of £20,000. This benefit is always paid as a cash sum.Analyst's commentMulti-benefit protection plans have become fashionable in recent years as the industry tries to encourage a more holistic approach to protection planning. Aegon Scottish Equitable has been a pioneer of this approach, offering a menu of benefits packaged for mortgage, family or business protection.
The Aegon Scottish Equitable protection menu ticks all the boxes with regards to the 'must-have' features of a solid proposition. Critical illness (CI) and income protection (IP) insurance are available on either guaranteed or rolling five-yearly reviewable rates.
A key attribute of a menu plan is flexibility. The plan's flexible construction permits any combination of life cover, life or earlier CI cover, CI cover, IP and waiver of premium to be included, either at the outset or later. The levels of cover can be varied on an ad hoc basis, subject to underwriting. This enables the plan to cope with changing needs without the administrative nightmares of multiple proposals, underwriting delays and direct debit payments.
More importantly, cover can also be adapted through a comprehensive range of guaranteed insurability options, and indexation is available based on the Retail Price Index.
The CI element provides cover for 31 conditions. In line with a majority of insurers, Aegon Scottish Equitable has yet to adopt the latest Association of British Insurers model wordings. It will be interesting to see if it adopts the new 'industry standard' or does something different.
For a multi-benefit plan to be a real success each layer of cover must be competitive in its own distinct market and this is true of the Aegon Scottish Equitable Protect proposition.
Nick Telfer, head of life and protection, Defaqto
