Protection Plans

Base plan details are available here. Always refer to the plan terms and condition for full plan details.

Adaptable Endowment Plan (DE)

The Adaptable Endowment Plan (AEP) is designed to fund an endowment mortgage and also be a good medium to long term savings plan. The Adaptable Mortgage Plan (AMP) is designed to fund an endowment mortgage only over terms of 10 to 25 years (longer terms are available where appropriate).

Available

  • AEP - 1 April 1983 to 31 January 1988
  • AMP - 1 April 1983 to February 1984

Benefits and Funds

  • Proceeds Payable Upon Death, Encashment or Maturity, the sum assured or cash - in value whichever is greater.
  • Funds Available, Managed Property Gilt Edged and Fixed Interest Deposit. The planholder may switch all or part of the units already allocated to another fund. If future contributions are to be allocated to Fixed Interest Deposit then all holdings must be in that fund. An administrative charge is payable. This is increased from time to time in line with Average Weekly Earnings (AWE).
  • Unit Allocation - AEP, No allocation in first 4 to 14 months depending on term.  Then 100% of contribution allocated, less Waiver of Contribution percentage (if applicable).
    AMP No allocation in first 5 to 17 months depending on term.  Then 100% of contribution allocated for monthly paid cases, less Waiver of Premium percentage (if applicable).
  • For annually paid cases allocation may be less than 100% for a time following Nil Allocation Period, please refer to the table in the policy provisions for confirmation of the exact details).
  • Deductions - Monthly deductions of units for: Expense charge and Mortality cost: This is based on difference between sum assured and cash - in value.

Charges

  • Annual Management charge of ¾% per annum, which is automatically reinvested into further units
  • Policy Review at 10th Plan anniversary and every five years thereafter. Annually for the last five years of the term and on last Valuation Date immediately proceeding Maturity Date. Favourable Review no change to be made (same sum assured, same contribution)
    Investment element is enhanced. Unfavourable Review, if the client wishes to maintain the Guarantee of Maturity Value (i.e. ensure that the value of the plan on the maturity date is at least equal to the sum assured)
    If the plan is more than 10 years from maturity = Increase contribution and /or term extension. If the plan has 10 years or less to maturity = term extension, and possible increase in  contribution. Client can decline to take action on a Bad News Review (unfavourable review) but they would then forfeit their Guarantee of Maturity Value and the  Maturity value would then be the bid value of units at maturity.

Stopping Contributions

  • AEP
    1. No value – the plan will lapse.
    2. Stop/Start (if eligible).  Refer to Stop/Start facility.
    3. After Stop/Start period has expired, the plan will be made Paid-Up (if cash value in excess of £1,000), or surrendered.
    4. Cash value more than £1,000 – the client can request that the plan be made Paid Up.
    If not eligible for Stop/Start or Paid - Up, the plan will be Surrendered.
  • AMP
    1. If plan has been In-force for at least 2 yrs the Plan will be made Paid-Up.
    2. The Stop/Start can apply for the first 13 months from the first day of grace - see Stop/Start facility.
    3. If payment stops before Plan has been In-force for 2 yrs:
    -  no value - plan will lapse
    -  cash value more than £1000 – the client can request that the plan be made Paid-Up.
    -  if ineligible to be made Paid-Up, or for Stop/start, plan will be surrendered.

Options

  • AEP: Reduced Sum Assured And Continuation Option, Increases, Early Cash Facility, Withdrawal Option, Regular Withdrawal Facility and Stop/Start Facility. If any option is exercised within 10 years of maturity, the term has to be extended to run for at least 10 years from the date the option is exercised.
  • AMP: (where different form AEP)
    Loan Repayment and Reduced Sum Assured Option, Increase Mortgage Option (IMO) – as per MIO on AEP and Waiver of Premium Benefit – as per WOC on AEP
  • Reduced Sum Assured and Continuation Options - On or after the 10th anniversary it may be possible to reduce the sum assured (to enhance the investment benefits of the plan), and / or extend the term.
    1.  MIO and Policy Reviews fall away if the sum assured reduces.
    2.  The Contribution does not reduce.
    3. The Maturity Date may be extended if necessary, (the maturity date will have to be extended if the sum assured reduced within 10 years of maturity).
    4. Options become available again at next Maturity Date.

For policies from April 1983 to September 1984 this Option was called : 'Loan Repayment and Reduced Sum Assured Option'.

  • Loan Repayment and Reduced Sum Assured Option  AMP only - Available on or after the 10th policy anniversary.
    Clients can take a partial surrender and reduce the sum assured but NOT the contribution provided :
    1. The remaining plan value exceeds the current minimum amount (£250).
    2. Policy remains within Qualifying Rules (Sum assured reduction in particular).
    Policy term is extended if necessary such that it runs for at least 10 years after the option has been exercised.

Increase Mortgage option will no longer be available once this option has been exercised. There will be no further Policy Reviews and the Guarantee of Maturity Value at least equal to Sum assured will be lost once this option has been taken. The option will be available again at the Maturity (or revised maturity) date.

  • Increases - Available on plan taken out after February 1985 provided contributions have not been suspended or are being waived. Any increase will go through its own nil allocation period.
  • Early Cash Facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken.  However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now.  For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed.  We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. An amount equal to one contribution must be left in the fund, (one being monthly or annual).
    Only available on plans taken out after 1 February 1985.  (If taken within 10 years, may give rise to a higher rate tax liability). For plans taken out before 1 February 1985 it may be possible to take a 'Partial Surrender' in certain circumstances, please refer to the Customer Services Division for clarification.
  • Withdrawal Option
    Available on policies commencing before the 1 February 1985 can be taken on or after the 10th policy anniversary available only if:
    1.  Contribution level for previous 10 years
    2.  No options exercised in previous 10 years
    3.  Policy value exceeds current minimum.

Contribution becomes £1 per annum, sum assured £50. Withdrawal can be taken on policy anniversary or 6 months from policy anniversary. Once this option has been taken there are no further policy reviews and all other options fall away.

  • Regular Withdrawal Facility
    Facility introduced February 1985. At the 10th anniversary clients may take regular withdrawals, i.e. monthly, quarterly, bi-annually, or annually, providing contributions have been paid in full and no other options have been exercised in the previous 10 years. The minimum cash-in value must exceed the current minimum. The Sum Assured reduces to £50.00 and the contribution to £1.00 per annum (the plan in effect becomes a Whole of Life policy). When converted to £1 per annum all other options fall away and there are no further policy reviews.
  • Stop/Start Facility - Client may miss up to 12 monthly payments, whilst still maintaining full life cover. The plan may be restarted by paying outstanding contributions or extending the term of the plan (Client may request Stop/Start), or Stop Start can be exercised due to non payment of contributions, requirements for Stop/Start -
    1. The fund value must be equal to, or in excess of, ¼ of the current annual premium.
    N.B:  No options allowed whilst plan is at Stop/Start status.
    2. If plan has remained in Stop/Start for 13 months and is not reinstated, then; if value less than £1000 plan is surrendered, if value more than £1000 = Paid-up.
  • Mortgage Increase Option (MIO) / Increase Mortgage Option (IMO)
    Enables plan holder to increase the plan up to twice the underwritten sum assured or up to £60,000, whichever is greater, to cover new mortgage or further advance without further underwriting. Increases above this limit are available but must be underwritten.
  • Waiver of Contribution (WOC) / Premium Benefit (WOP)
    Contributions will be waived if the plan holder is totally disabled due to sickness or accident for more than three months, and is unable to earn a living from his usual occupation or one which is reasonably suitable for as long as he is disabled or until retirement age.

Taxation and Trusts

Proceeds are tax free after 10 years, or ¾ of the term, whichever is sooner, provided contributions have been paid in full. Early Cash Facility only tax free if taken after 10 years.

The policy can be written in trust.

Adaptable Endowment Plan (DF)

Available 1 February 1988  to 20 February 2000 for terms of 10 to 25 years (longer terms are available where appropriate) in three variants:

  • Homebuyer: designed to fund an Endowment  Mortgage and also a good medium to long term savings plan
  • Low-Start: is designed to fund an Endowment Mortgage and also a good medium to long term savings plan.  The contribution increases by 25% of that payable at commencement, each year for 4 years.  In year 5 contributions will have doubled.
  • Savings: is designed to be used as an investment policy with an option to use against a mortgage in the future.  (The Savings version of the AEP not available after 1 July 1992)

Benefits, Funds and Units

Proceeds payable upon death, encashment or maturity. Where the Lifeline or Lifestyle Benefit has been selected the sum assured is payable on the first of the following events:

  • Death or Diagnosis of the Life Assured suffering from a specified "critical" illness that meets our plan definition. The critical illness covered and their definitions are set out in the plan terms and conditions. Permanent total disability (any occupation) before age 65 for males, 60 for females.
  • Death Benefit - The Sum Assured or cash - in value whichever is greater.
  • Plus 5 Benefit Applies to plans sold from 15 June 1999. The Maturity value and surrender value in the two years up to maturity is increased to 105% of the cash value.
  • Funds Available: Managed ,Equity, Overseas Earnings, Property, Gilt Edged, Fixed Interest Deposit, American Managed, American Equity, American Property, Far East and European.
    No more than four Funds at any one time. The plan holder may switch all or part of the units already allocated to another fund.  An administrative charge is payable, which is increased from time to time in line with Average Weekly Earnings (AWE). A plan holder may elect to allocate future contributions to a different fund(s) provided that units are held in no more than four funds at any time.  No administration charge is payable.
  • Unit Allocation - Policies Commencing Before June 1990 102% of contribution allocated, less Waiver of Contribution percentage if applicable. Nil allocation period varies, depending on term and version, and clients age at commencement. For ages less than 40: Homebuyer and Savings version - nil allocation period between 7 and 17 months.Low-start version - nil allocation period between 8 and 19 months. (For ages 40 and over, add one month).
    Policies Commencing On Or After 1 June 1990, 100% of contribution allocated, less Waiver of Contribution percentage if applicable. Nil allocation period varies, depending on term and version. Homebuyer and Savings version - nil allocation period between 10 and 27 months. Low-start version - nil allocation between 11 and 30 months.
  • Deductions monthly deduction of units for:
    1. Expense charges.
    2. Mortality cost, this is based on difference between Sum Assured and cash - in value.
    3. Morbidity cost, if the Lifeline or Lifestyle Benefit is added.
  • Charges - For policies dated between February 1988 to May 1990 the annual management charge is ¾% per annum, and is automatically reinvested into further units. This increased to 1.25% for policies dated June 1990 onwards.
  • Policy Review - On 10th Plan anniversary and every five years thereafter. Annually for the last five years of the term. On last Valuation Date immediately proceeding Maturity Date. However, there would be no reviews for 3 years following the client exercising MIO or BIO where the contribution increases.
    Favourable Review - No changes are made to the sum assured or contribution.The Investment element is enhanced.
    Unfavourable Review, If the client wishes to maintain the Guarantee of Maturity Value (i.e. ensure that the value of the plan on the maturity date is at least equal to the sum assured): If the plan is more than 10 years from maturity = Increase contribution and /or term extension. If the plan has 10 years or less to maturity = term extension, and possible increase in  contribution. Client can decline to take action on a Bad News Review (unfavourable review) but they would then forfeit their Guarantee of Maturity Value and the  Maturity value would then be the bid value of units at maturity.

Stopping Contributions

  • February 1988 To May 1989 Plans Without Lifeline Benefit.
    1. No value – the plan will lapse
    2. Cash value of more than £1000.  The client can request that the plan be made Paid-Up.
    If eligible - Stop/Start  (see Stop/Start facility).  After Stop/Start period has expired, the plan will be made Paid-Up (if cash value in excess of £1000), or surrendered is less).
  • February 1988 - May 1989 With Lifeline Benefit.
    1. No value – the plan will lapse.
    2. Cash value of more than £1000. The client can request that the plan be made Paid-Up.
    If eligible – Stop/Start (See Stop/Start facility).  After Stop/Start period has expired, the plan will go to SAC if eligible, and if cash value in excess of £1000.  (See Sum Assured Continuation). If the cash value is less than £1000 the plan will be surrendered. If not eligible for Stop/Start or Paid-Up, the plan will be Surrendered.
  • May 1989 Policies, Onwards
    1. No value – the plan will Lapse
    2. If eligible - Stop/Start (see Stop/Start facility).  After Stop/Start period has expired, the plan will go to SAC if eligible, and if cash value in excess of £1000.  (See Sum Assured Continuation).
    3. If the cash value less than £1000 after Stop/Start period, plan will be Surrendered.
    4. If not eligible for Stop/Start, the plan will be Surrendered. There is no `Paid - Up' facility available nor can the client cannot request Stop/Start.

Options

  • Reduced Sum Assured And Continuation Options - At any time on or after the 10th policy anniversary the plan holder may elect to:
    1. Reduce the sum assured (to enhance the investment benefits of the plan)
    2. Extend the term.
    Any reduction in the sum assured are subject to the reduction not being so large as to result in the plan becoming non-qualifying and the Mortgage Increase Option will fall away. In all cases the contributions payable cannot reduce, after exercising the option the term must be extended, if necessary, to run for at least another ten years and the Maturity Date is postponed accordingly and the options are available again (subject to the same conditions) at the next Maturity Date.
  • Increases - Available on all plan types provided contributions have not been suspended or are being waived. Any Increase will go through its own nil allocation period.
  • Mortgage Increase Option (MIO) - Enables plan holder to increase the plan up to twice the underwritten sum assured or up to £60,000, whichever is greater, to cover new mortgage or further advance without further underwriting. Increases above this limit are available but must be underwritten.
  • Waiver of Contribution (WOC)
    Contributions will be waived if the plan holder is totally disabled due to sickness or accident for more than three months, and is unable to earn a living from his usual occupation or one which is reasonably suitable for as long as he is disabled or until retirement age.
  • Making The Plan Paid Up
    Available on plans taken out before 1 May 1989 (i.e. versions 10101 and 10102).
    Must have minimum fund value of £1,000.  Sum Assured becomes the cash - in value.
  • Stop/Start Facility
    Client may miss up to 12 monthly payments, whilst still maintaining full life cover.  The plan may be restarted by paying outstanding contributions or extending the term of the plan.
    1. Pre May 1989 Policies (i.e.. Versions 10101 And 10102).  The client can request Stop/Start.
    2. Post May 1989 Policies (Versions 10103 Onwards).  The client cannot request Stop/Start.
    Plans can only be put on Stop/Start as a result of non - payment of contributions.

Requirements For Stop Start, the fund value must be equal to, or in excess of, 1/4 of current annual premium.  For plans with the Lifeline or Lifestyle Benefit, the value must be equal to, or in excess of ½ the current annual premium.  No options are available whilst plan is at Stop/Start. If the plan has remained at Stop/Start for 13 months and is not reinstated then if the value is less than £1,000 plan will be surrendered, if more than £1,000 the plan will be put to SAC.


  • Sum Assured Continuation (SAC) - full life cover will be maintained whilst premiums are not being paid, until the cash value of the policy is extinguished. SAC cannot be requested by the client, it can only be applied as a result of underpayment.
    February 1988 to May 1989 with Lifeline (only versions 10102 onwards) plan will go into SAC if value is in excess of £1000 after the 12 month Stop/Start facility, unless outstanding contributions are paid or policy term is extended.
    From 1 May 1989 onwards Policy will go into SAC if value is in excess of £1000 after the 12 month Stop/Start facility unless outstanding contributions are paid or policy term is extended. Policies cannot be reinstated from SAC. Whilst in SAC Policy can be surrendered on request.
  • Early Cash Facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken.  However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now.  For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed.  We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. An amount equal to one contribution must be left in the fund, (one being monthly or annual). If taken within 10 years from commencement, may give rise to a higher rate tax liability.
  • Lifeline Benefit may be added to plans sold from 15 May 1989 to 14 February 1993 (versions 10103 to 10105) within two years of commencement. The critical illnesses covered and their definitions are set out in the plan terms and conditions.

It was not possible to add the Lifestyle Benefit to these versions of the plan.  Instead, the client would have needed replace their existing AEP with a new AEP with Lifestyle Benefit under the Replacement Policy Arrangement.

  • Lifestyle Benefit may be added to plans sold from 15 February 1993 (version 10106 upwards) within two years of commencement. The critical illness covered and their definitions are set out in the plan terms and conditions.

Cover for the Children's Benefit, Additional Critical Illness Benefit and Permanent Total Disability (PTD) OWN Occupation available on the ‘new’ Lifestyle and Lifestyle Plus products was is NOT available on AEP Products.

Taxation and Trusts

The surrender proceeds are tax free after 10 years, or 3/4 of the term, whichever is sooner, provided contributions have been paid in full. Early Cash Facility proceeds are only tax free if taken after 10 years.

The policy can be written in trust.

Adaptable Life Plan (DB)

Available May 1989 - February 1994

Provides a high level of life cover with investment benefits being attained over the longer term. No set term as whole of life written as single life, joint life first death or joint life second death. On a Joint Life Second Death plan the cash value increases on the first death as the plan then, in effect, changes to a single life basis).

Minimum and Maximum Ages at Commencement

  • DBS Minimum 17 next birthday, Maximum 84 next birthday
  • DBF Minimum 17 next birthday, Maximum 60 next birthday
  • DBL Minimum 17 next birthday, Maximum 84 next birthday

Benefits, Funds and Units

Proceeds are upon first / second death or encashment, death benefit is the sum assured or cash value - whichever is the greater.

  • Lifetime Plus (LT+), (available February 1985), not available on Second Death plans.
  • Lifetime Protection (LTP), Level cover throughout policy life.
  • Extra Cover provides extra cover for first 10 years of plan and a reduced level thereafter (the level of cover in force at the 10 year point may be maintained for an increased premium, known as the Continuation of Maximum Sum Assured Option). Extra Cover version is not available on Second Death plans.
  • Funds Available 100% to Managed, Property, Gilt Edged or Fixed Interest Deposit. Fund Switches, minimum switch value £500, there is a fixed switch charge which is increased in line with Average Weekly Earnings (AWE).
  • Unit Allocation, 100% of contributions (97.5% allocation on joint life second death plans).are allocated to units (excluding WOC.) The date of the first allocation is dependent upon the age next birthday and payment frequency.The month of the first allocation will range from 11 to 37.
  • Deductions - Expense charge units are deducted equal to the value of the monthly expense charge and is indexed each year. Mortality charge is based on the company's own experience.
  • Charges, although there is no Fund Management charge an equivalent amount is still deducted from the total fund value but automatically reinvested back into the policy the management charge was ¾% until June 1990 - then increased to 1¼%
  • Policy Reviews occur on the 10th anniversary and every 5 years thereafter until age 70 when then takes place yearly A favourable review will result in an increase in the level of life cover An unfavourable review will lead to an increase in contribution.

Options

  • Stopping Contributions - If the plan has no value it will lapse, if the plan value is less than £1000 it will be surrendered. If the plan value is greater than £1000 Sum Assured Continuation option comes into operation (i.e. the life cover is maintained until the fund value is extinguished). (S.A.C. cannot be requested). For this facility to be available on a joint life second death plan, one of the lives assured must have died. Otherwise the plan will be Surrendered. Whilst in SAC it is possible to reinstate within 13 months from date the last contribution was paid, but all missed contributions must be paid. Whilst in SAC the Plan can be surrendered on request.
  • Surrender, the plan can be surrendered at any time for the full bid value of the units held in the fund, there is no surrender charge.
  • Early Cash facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken. However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now. For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed. We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. An amount equal to one monthly or annual contribution (depending on the chosen payment frequency) must be left in the fund.

In the case of Extra Cover plans, where the life assured is 55 or over at the time of the Early Cash payment, then the minimum acceptable residual fund value is one year's contribution plus one payment - i.e. 13 months or 2 years depending on payment frequency.) If the Early Cash facility is taken within 10 years from the commencement, it may give rise to a higher rate tax liability

  • Increases are available but will need to be underwritten any increase will go through its own nil allocation period).
  • Indexation available on all versions of the policy. The Sum Assured increases in line with AWE  Indexation occurs automatically on each policy anniversary date. The policy holder is advised of the increase and if the increase is subsequently declined the benefit falls away.
  • Waiver Of Contribution is available on all versions of the policy. WOC must be chosen at commencement. Under this benefit premiums are 'waived' should life assured be unable to earn a living through their usual form of occupation for a period of more than 3 months. The benefit will apply up to the policy anniversary immediately preceding age 65 male / 60 female.
  • Convertion To An Investment Policy (Reduced Sum Assured Option) Plan version can be made into "Lifetime Plus".  The life cover is reduced to the minimum and contributions remain at original level so enhancing the investment potential.  This can be done at any time.

Taxation and Trusts

If the policy is Surrendered at any time after 10 years then, providing contributions have been maintained, the benefits may be paid free of any income tax liability.

The policy can be written in trust.

Adaptable Life Plan (DD) 

Available February 1983 to April 1989

Provides a high level of life cover with investment benefits being attained over the longer term, can be written Single life, Joint Life First Death or Joint Life Second Death.

On a Joint Life Second Death plan the cash value increases on the first death as the plan then, in effect, changes to a single life basis.

Proceeds Payable upon first/second death or earlier encashment, death benefit is the sum assured or cash value - whichever is the greater.

Choice Of Sum Assured (Cover Type)

  • Lifetime Plus (LT+) available February 1985, greater investment potential, not available on Second Death plans.
  • Lifetime Protection (LTP) Level cover throughout policy life.
  • Extra Cover (available February 1983) Provides extra cover for first 10 years of plan and reduced level thereafter (initial level of life cover may be maintained for an increased premium from the end of the 10th year, known as the Continuation of Maximum Sum Assured Option). This version is not available on Second Death plans.

Unit Allocation

  • Funds Available 100% to Managed, Property, Gilt Edged or Fixed Interest Deposit.
  • Fund Switches, minimum switch value £500, there is a fixed switch charge which is increased in line with Average Weekly Earnings (AWE). (Pre 1985 policies = ½% charge)
  • Unit Allocation 100% (97.5% allocation on Joint Life Second Death plans) of contribution allocated to units (excluding WOC.) Date of first allocation dependent upon Age at Next Birthday and frequency of payment, month of first allocation will range from 8 to 25.

Charges

Expense charge, units deducted to cover the monthly expense charge, indexed each year.Mortality charge, based on the company's own experience.

Fund Management Charges, although there is no Fund Management charge the charge is still deducted from the total fund value and automatically reinvested back into the policy. This charge was ¾% until June 1990 - then increased to 1¼%.

Policy Reviews

On 10th anniversary and every 5 years thereafter until age 70 - then takes place yearly

  • Lifetime Plus Version, Favourable Review means no change to be made, investment element is enhanced. Unfavourable Review means an increase in contribution or reduction in life cover.
  • Other Versions, Favourable Review Pre February 1985 policies - Increased life cover. Post February 1985 policies - No change to be made, investment element is enhanced. Unfavourable Review, increase in contribution or reduction in life cover.

Options

  • Stopping Contributions, If value is greater than £1000 plan becomes paid-Up, if value is less than £1000 plan is surrendered, if there is no value the plan will Lapse. Surrender at any time is the full bid value of units in fund, no surrender charge.
  • Paid Up Term Option (PUTO), Must be requested, with a plan value must be at least £1000 and in force for at least four years. Premiums cease and cash in value is used to maintain life cover. Policyholder has no right to reinstate once chosen but can take the remaining cash value at any time. If Joint Life Second Death one Life Assured must have died before PUTO available.
  • Early Cash Facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken. However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now. For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed. We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. An amount equal to one contribution must be left in the fund, (one being monthly or annual). (In case of Extra Cover plans where the life assured is 55 or over at the time of the Early Cash payment, then the minimum residual value is one year's contribution plus one payment - i.e. 13 months or 2 years depending on payment frequency.) If the Early Cash facility is taken within 10 years from the commencement, it may give rise to a higher rate tax liability.
  • Increases, available on policies issued on or after 1 February 1985. Will need to be underwritten. Increases are not available on product versions 17071, 17081 and 17091. Any increase will go through its own nil allocation period.
  • Withdrawal Option, available on (product version 10101) policies issued before 1 February 1985, after which option changes to Regular Withdrawal Option, in the form of a Partial Surrender, it is NOT possible to set up a regular withdrawal facility. This is available only if no other option has been exercised within the previous 10 years (e.g. Early Cash Facility), and level premiums for at least 10 years. The cash value must be equal to £5000 or more, the contribution becomes £1 annually and sum assured £50. Must be taken on the 10th policy anniversary or any subsequent policy anniversary, or on a date six months after such an anniversary. Once taken no further policy reviews, all other options fall away.
  • Regular Withdrawals available on policies issued after 1 February 1985 (product version 10102) until version 10104 (February 1898) when Inland Revenue changes meant that the option could no longer be offered. Available only if no other option has been exercised within the previous 10 years (e.g. Early Cash Facility) and level premiums for at least 10 years. Cash value must exceed current minimum. Contribution becomes £1 annually and Sum Assured £50. Can be taken on or after the tenth policy anniversary, either monthly, quarterly, half yearly or yearly. Once taken there are no further policy reviews, all other options fall away.
  • Guaranteed Insurability Option Benefit (GIOB), available under Lifetime Protection Plan only. Sum Assured can be increased every 3 years without medical evidence. If not taken benefit falls away.
  • Indexation, available on all versions of the policy. Sum Assured increased in line with the Average Weekly Earnings (AWE). Policyholder requests and returns advice slip if wishes to take up Indexation option. Advice is sent at each anniversary date. If declined benefit will fall away.
  • Waiver Of Contribution (WOC) is available on all versions of policy, must be chosen at commencement. Premiums are 'waived' should the assured be unable to earn a living through usual form of occupation for a period of more than 3 months. The benefit will apply up to the policy anniversary immediately preceding age 65 male/60 female.
  • Convert To An Investment Policy (Reduced Sum Assured Option) Pre - February 1985 the policy holder can reduce life cover, but must maintain the original level of contribution. Cash-in value of plan will be enhanced compared to if full life cover had been maintained. Plan must be in force for 10 years or more and all other options (GIOB etc.) will fall away except WOC which will remain.

Post - February 1985 the above option is available or 'convert' to "Lifetime Plus" version - see Adaptable Life Plan (DB).

Taxation & Trusts

If the policy is Surrendered at any time after 10 years then, providing contributions have been maintained, the benefits may be paid free of any income tax liability.

The policy can be written in trust.

Adaptable Life Plan (DP)

Whole Of Life plan available February 1994 to July 2004 , to provide a high level of life cover with investment benefits being attained over the longer term, no set term as whole of life. Can be written as Single Life, Joint Life First Death or Joint Life Second Death. On a Joint Life Second Death plan the cash value increases on the first death as the plan then, in effect, changes to a single life basis).

Benefits, Funds and Units

  • Proceeds are payable upon first / second death or encashment, the death Benefit is the sum assured or cash value - whichever is the greater.
  • Maximum Cover (not available on plans with a declaration date later than 16 June 2003) provides maximum cover for first 10 years of plan and reduced level thereafter. The level of cover in force at the 10 year point may be maintained for a further 10 years for an increased premium at the 10th anniversary.
  • Extra Cover (not available on plans with a declaration date later than 16 June 2003) provides extra cover (but not maximum) for first 10 years and a reduced level thereafter. The level of cover in force at the 10 year point may be maintained for a further 10 years for an increased premium from the 10th anniversary.
  • Lifetime Protection provides level cover throughout policy life (subject to indexation and reviews).
  • Funds Available - Initial allocation to fixed interest, during the nil allocation period, automatic switch to managed once units become positive (i.e. at the next month end). Switching to 100% managed, property, gilt edged or fixed interest then allowed. Fund switching, minimum switch value £500, there is a fixed switch charge which is increased in line with Average Weekly Earnings (AWE).
  • Unit Allocation - 100% of contributions are allocated to units (excluding WOC.) The date of the first allocation is dependent upon the age next birthday, sex, smoker status and payment frequency.
  • Charges units are deducted equal to the value of the monthly expense charge and is indexed each year. Mortality charges are taken based on the company's own experience. The annual management charge is 1¼% per annum but automatically reinvested back into the policy.
  • Policy Reviews occur on the 10th anniversary and every 5 years thereafter until age 70 when then takes place yearly. A favourable review will result in an increase in the level of life cover while an unfavourable review will lead to an increase in contribution.

Options

  • Stopping Contributions - If the plan has no value the policy will Lapse, if plan value is less than £1000 it will be surrendered. If plan value greater than £1000 the Sum Assured Continuation option comes into operation (i.e. the life cover is maintained until the fund value is extinguished). (S.A.C. cannot be requested).. For this facility to be available on a joint life second death plan, one of the lives assured must have died. Otherwise the plan will be Surrendered. Whilst in SAC it is possible to reinstate within 13 months from date the last contribution was paid, but all missed contributions must be paid. Whilst in SAC the Plan can be surrendered on request.
  • Surrender the plan can be surrendered at any time for the full bid value of the units held in the fund. There is no surrender charge.
  • Early Cash Facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken. However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now. For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed. We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. An amount equal to one monthly or annual contribution (depending on the chosen payment frequency) must be left in the fund. In the case of Maximum and Extra Cover plans, where the life assured is 55 or over at the time of the Early Cash payment, then the minimum acceptable residual fund value is one year's contribution plus one payment - i.e. 13 months or 2 years depending on payment frequency. If the Early Cash facility is taken within 10 years from the commencement, it may give rise to a higher rate tax liability.
  • Increases are available but will need to be underwritten, any increase will go through its own nil allocation period.
  • Indexation is available on all versions of the policy, the Sum Assured can be increased in line with the AWE, 5% or 10%. Indexation occurs automatically on each policy anniversary date. The policy holder is advised of the increase and if the increase is subsequently declined the benefit falls away. On Maxi and Extra cover versions of the plan premiums can be indexed in line with AWE, 5% or 10% until such time as the indexed premium reaches Lifetime Protection rates.
  • Waiver Of Contribution (WOC) is available on all versions of the policy, WOC must be chosen at commencement. Under this benefit premiums are 'waived' should life assured be unable to earn a living through their usual form of occupation for a period of more than 3 months. The benefit will apply up to the policy anniversary immediately preceding age 65 male / 60 female.

Taxation and Trusts

The death benefit will not attract any tax liability. If the policy is surrendered there may be a tax liability for higher rate or additional rate tax payers.

The policy can be written in trust.

Adaptable Term Plan

The Adaptable Term Plan (ATP) closed to new business with effect from 23 July 2010.

Terms

  • Age range: Minimum age 16 attained - Maximum age 58 attained, at plan commencement
  • Terms available: 1 to 42 years. The initial term must end no later than the anniversary after the life assured's 59th birthday. The plan must end before the life assured's 75th birthday.

Guaranteed Payments only - Premium will only increase if indexation or Guaranteed Insurability Option increases sum assured, or if renewability option chosen at end of term.

Renewable term

This will allow the customer at the end of the term, even if contributions are being waived at the time, to renew the life cover (and the Waiver of Benefit, if present):

  • For a further term (usually equal to the original term).
  • Regardless of the life assured’s state of health at the time.
  • At contribution rates applicable to the age of the life assured when the option is exercised.
  • With Indexation Benefit continuing for the further selected term.
  • A declaration may be required from non-smokers that they remain non-smokers.
  • If the end of the extended term would fall on or after the life assured’s 60th birthday, it will be possible to renew on a term only basis up to age 75.

The main optional benefits the plan can include are:

Indexation

If selected, the life cover will increase automatically each year in line with rises in the Average Weekly Earnings (AWE). The premiums will increase by slightly more than the AWE to reflect the increase in age of the customer. Once indexation has been removed from the plan, it cannot be re-selected.

Guaranteed Insurability Options (GIO)

This allows cover to be increased if the life assured is aged 54 or younger (on joint lives the older person must be 54 or younger) within certain limits, without having to provide any more details about their health and activities for a number of reasons:

  • Increasing a mortgage (to buy or improve main residence - known as the "Mortgage Increase Option").
  • Marrying (but not if previously been married to the same person).
  • Divorcing (but not if previously been divorced from same person).
  • Entering into a civil partnership (but not if previously entered into a civil partnership with the same person).
  • Ending a civil partnership (but not if previously ended a civil partnership with the same person).
  • Becoming the natural parent of a child (a multiple birth is classed as one event).
  • Legally adopting a child (if more than one child is adopted at the same time this is classed as one event only).
  • Increasing salary after a promotion or change of job.
  • Changing your business assurance needs if the value of your business, company or partnership increases.
  • Changing your business assurance needs if the value of a key individual to the business increases.
  • Entering into a new commercial loan or increasing an existing one.

However the life assured's health, activities or both may mean that we are unable to include this option in the plan and if this is the case the plan schedule will show if the GIO does not apply.

You can use the GIO on this plan more than once, but the total increase to your plan is limited to:

  • £250,000 or half the amount of cover at the start of the plan for business assurance (except key individual) increases or commercial loan increases, whichever is the lower amount;
  • £150,000 or half the amount of cover at the start of the plan for key individual increases, whichever is the lower amount;
  • £150,000 or the amount cover at the start of the plan, whichever is lower for other events.

The GIO cannot be exercised if Payments are being waived. Certain limits and conditions apply to GIO's; please refer to the terms and conditions for further information.

Increases

Underwritten increases can be requested at any time and will be based on the original terms and conditions. Where the increase is only acceptable on different terms to those applying to the current plan, then this would be processed as a new plan.

Waiver of payment

This benefit cannot be included if the life assured is older than 55 when the plan starts.

For an extra monthly amount, premium payments will be maintained if the life assured is incapacitated by illness or injury for at least three months continuously and unable to work in their own occupation.

This benefit must be included when the plan starts, it can’t be added later. The benefit stops from the earlier of the customer recovering, returning to work, reaching age 65, death or they are diagnosed with a terminal illness and are expected to live for less than 12 months.

We won't pay the benefit if the customer had the illness or injury which caused the incapacity before the plan started. For details of other events which would mean we wouldn't pay this benefit, please refer to the terms & conditions.

Adaptable Term Plan (DA)

Qualifying Term Assurance policy available from January 1987 to March 1992

  • Minimum 17 next birthday, Maximum 60 minus term for the Renewable & Convertible version of the Plan, 66 minus term for the Convertible version of the plan.
  • Provides life cover only. There are no investment benefits.
  • Term Any term can be chosen (minimum 1 year) provided the end of term falls before life assured's 60th birthday (RCT) or life assured's 66th birthday (CTA)
  • Basis written Single life (DAS) or Joint life first death (DAF)

Versions of the Plan

Renewable Convertible Term (RCT) has two main options:

Conversion option allows policyholder to convert the plan during the term into a whole of policy providing life cover only for the same without further medical evidence.

Renewal option allows policyholder to renew life cover at the end of the term for a further period without the need for further medical evidence, even if WOC being operated.

Convertible Term Assurance (CTA)

Allows policyholder to convert the plan during the term into a whole of policy providing life cover only for the same without further medical evidence.

Benefits, Funds and Units

Proceeds are payable on death during termUnits are allocated in a fund chosen by the Company, (monthly expense and mortality charges are recovered by deduction from units). This allocation to units is to keep the plan 'on track' at each Policy Review. From the policyholder's point of view:

  • there is no cash value at any point,
  • there is no choice of funds, and
  • no unit information will be available relating to the plan.

Regular policy reviews take place to ensure that the policy is 'on track'. The benefits under the plan will be reviewed in the light of actual mortality experience, expenses and investment return. The timing of the reviews depends on the term selected but are generally on every 5th anniversary and the last four anniversary dates prior to the end of the term.

Charges

A policy charge is included in each contribution to cover the expected expense of administration costs. For Level plans this is a fixed policy amount (this will remain level between policy review dates). For plans with the Indexation benefit, the charge is an indexed policy charge that increases in line each year with Average Weekly Earnings (AWE).

Stopping Contributions

The policy will automatically lapse after 30 days of grace and life cover will cease.

Additional Benefits

  • Waiver Of Contribution Benefit (WOC) Can only be incorporated at commencement. If the life assured is disabled and unable to earn their living from their normal occupation for more than 3 months, then the contribution will be waived for as long as the Life Assured remains disabled or until normal retirement age. In addition the contributions collected during the 3 month deferred period will be refunded.
  • Indexation is available to both versions. Life cover level is automatically increased at policy anniversary date in line with AWE.This benefit will fall away if indexation is declined by the policyholder and is not available if the term in excess of ten years. (It is not possible to reinstate the Indexation benefit once cancelled).
  • Special Event Benefit (SEB) allows for an increase in the level of life cover on the occurrence of specified events such as marriage, divorce, adoption, birth of child, mortgage increase purposes or receipt of an inheritance. Maximum per event : up to the lesser of 50% of the level of life cover at commencement or £60,000. Overall Maximum : twice the sum assured at commencement.

Options

  • Increase option can be exercised at any time, subject to Underwriting, if the level required is outside that of Indexation level or Special Event Benefit available. Subject to underwriting and an increase in contribution. Conversion and Renewal Options, see above for details

Taxation and Trusts

As the policy offers no investment potential there is never any tax liability.

The policy can be written in trust.

In March 1992 Zurich launched a new version of the Adaptable Term Plan which differed from the earlier version (detailed above) in the following respects.

Available from March 1992 to February 1996. In addition to the RCT and RTA versions of the plan Zurich introduced two new versions:

Term Only (TA)

The sum assured is payable in the event of the death of the life assured (or on the first death for a joint life plan) during the term.

Renewable Term (RTA)

This allows the plan holder to renew the plan for a further term (normally equal to that selected at outset) at the end of the original term.

Term

  • Life Assured's 60th birthday (RTA) version.
  • Life Assured's 70th birthday (CTA) version.
  • Life Assured's 75th birthday (TA) version.

Overall maximum terms:RCT, RTA 30 yearsCTA 50 yearsTA 50 years

The restriction disallowing indexation on plans with a term of more than 10 years was removed with the launch of the new version of the plan in March 1992.

Special Event Benefit (SEB) is is not available on the TA and RTA versions of the plan.

Options

Mortgage Increase Option (MIO) available on all versions of the plan, as a 'distinct option', i.e. it is no longer part of the Special Event Benefit. MIO enables plan holder to increase the plan up to twice the underwritten sum assured or to £60,000 (whichever is greater), to cover the new mortgage or further advance, without further evidence of health. (This figure is less any Special Event Benefit already taken.)

Growth Protector Plan (AB)

Whole of life plan available from 1 May 1971 to 31 August 1975. The plan provides a high amount of life cover and long term investment, written on single life only.

Benefits, Funds and Units

  • Proceeds Payable Upon death or earlier encashment.
  • Death Benefit Guaranteed sum assured or cash - in value which ever is greater.
  • Funds Available 100% to the managed fund only.
  • Unit Allocation, units purchased are capital units in the managed fund, the percentage allocated varies according to age and policy year: - Year 1 no allocation - Year 2 60% - Year 3 and onwards 60% or more dependant on age
  • Fund Management Charges, for plans issued up to 6/4/72 3/8%, for plans issued between 6/4/72 and 1/1/76 1/2%.
  • Stopping Contributions, if cash - in value exceeds £250.00 the plan will be made paid up, if it is less than £250.00 the plan will be surrendered.

Additional Benefits

  • Accidental Death Benefit, in the event of death by accident before age 65, an amount equal to the sum assured will be paid out in addition to the normal death benefit.
  • Family Income Benefit (FIB), in the event of the life assured dying within 20 years or before their 65th birthday, if this is sooner, a monthly income will be paid through to the end of 20 years or the policy anniversary when the life assured would have been 65.
  • Renewable Convertible Term, in the event of the death of the life assured within the 10 year period, an additional sum will be payable over and above the death benefit on the basic plan. This benefit can be converted to an Adaptable Life Plan, or can be renewed for a further 10 years.
  • Waiver Of Contribution (WOC), if the life assured is totally disabled through sickness or accident, for more than 3 months and prevented from carrying on his usual occupation, all contributions will be waived by the Company up until their 60th birthday or on return to work, whichever is the sooner.

Options

  • There is no facility to increase, set up regular withdrawals or take partial surrenders
  • Paid Up Limit, - the cash-in value must exceed £250.00, Capital units are converted into Accumulation units and the Death Benefit is a percentage of the Cash-in value at the time of death, although never less than 101%

Taxation and Trusts

Proceeds are tax-free after ten years, if the policy is cashed-in before 10 years the proceeds may be potentially liable to higher rate tax.

The policy can be written in trust.

Homeowner Plan (DR)

The Homeowner Plan was designed to protect and repay an endowment mortgage only. Available 21 February 2000 to 31 October 2001.

Level Plans available with terms of 15 to 25 years (longer terms are available where appropriate) subject to a maximum age on maturity of 70 while Low Start Plans had a minimum 25 year term again subject to a maximum age on maturity of 70.

Benefits, Funds and Trusts

  • Proceeds payable upon death, the diagnosis of a specified 'critical illness' that meets our plan definition, encashment or maturity. The death benefit is the life cover sum assured or cash - in value, whichever is greater.
  • Lifestyle Benefit is automatically included.
  • The critical illnesses covered and their definitions are set out in the plan terms and conditions. If the medical condition arises while the Life Assured is living abroad, in the event of a claim, the Life Assured will be required to return to the United Kingdom or a country acceptable to Zurich (the geographical limits) before the benefit will be paid.

The amount payable following a claim will be the lifestyle sum assured or cash – in value whichever is greater.

  • Funds Available; Managed, Property, Equity, Fixed Interest Deposit, Overseas Earnings, Gilt Edged, American Equity, American Managed, American Property, Far East ,European. Although the planholder could choose one fund or a mixture of funds up to a maximum of four, unless they requested a specific fund or funds, their contributions were allocated to the Managed Fund automatically. At least 10% of the contribution had to be allocated to each fund selected. The planholder may switch all or part of the units already allocated to another fund. An administrative (switch) charge is payable. This is increased from time to time in line with Average Weekly Earnings (AWE).

Future contributions can be allocated to a different fund or funds at any time subject to at least 10% of the contribution being allocated to each selected fund.

  • Unit Allocation - For an initial period (called the Reduced Allocation Period or RAP) 70% of the contribution (including the Fixed Plan Amount but excluding the charge for Waiver of Contribution) is allocated to accumulation units of the Managed Fund. At the end of the RAP 101% of the client’s contribution is allocated to units. The length of the RAP will vary by age, term and plan type up to a maximum of 92 months. Increases in contributions are treated in exactly the same way

Charges

From commencement we will make monthly deductions, for the monthly expense charge, the monthly mortality cost and the monthly morbidity cost

An annual fund management charge of 1¼% pa is taken from the fund with ½% a year reinvested in further units for the benefit of the Plan.

Plan reviews will take place on the 5th Plan anniversary and every five years thereafter until the last four anniversary dates before the maturity date when annual reviews will be done. On last Valuation Date immediately proceeding Maturity Date, a favourable review with same sum assured, same contribution, the Investment element is enhanced. An unfavourable review; If the client wishes to maintain the Guarantee* of Maturity Value (i.e. ensure that the value of the plan on the maturity date is at least equal to the sum assured) the planholder has to extend the term of the plan, increase the basic contribution, or both.

*Please note that this guarantee is not available if the client chooses a higher assumed rate of investment growth than we recommend (i.e.7%).

The client can decline to take action on an unfavourable review but they would then forfeit their Guarantee of Maturity Value and the Maturity value would then be the bid value of units at maturity.

  • Stopping Contributions - if the plan has no value when the planholder stops making contributions the plan will lapse. If the plan value is below £1000 when contributions cease, the plan will be taken to have been surrendered at the end of the 30 days of grace. If the cash value exceeds £1000 when the planholder stops making contributions, the plan will be made paid-up. The plan may be cashed in at any time while it is paid-up. Where contributions have stopped (and the plan has a cash value in excess of £1000) the plan may be reinstated, at Zurich’s discretion, within thirteen months of the first non-payment of a contribution. To reinstate the plan, either the missed contributions must be paid in full or the term must be extended.

Options

If any option is exercised within 10 years of maturity, the term has to be extended to run for at least 10 years from the date the option is exercised. The plan is available in two versions:1) Homeowner, this version of the plan was designed to be used to build up sufficient capital to repay an existing or new mortgage. In this version the Plan provides an amount equal to the guaranteed sum assured at the maturity date provided the standard assumptions are met. Any excess performance creates surplus cash for the client or allow early repayment of the mortgage.2) Low Start Homeowner, designed to meet the same objectives as the Homeowner but for a given sum assured, contributions begin at approximately 70% of those required on the Homeowner. To ensure the Low Start Homeowner Plan will generate sufficient funds to repay the mortgage the contributions will be automatically increased at 5% a year compound for the first 10 years of the Plan and after that the contribution will remain level.

  • Choice of Assumed Growth Rate, the client can choose a growth rate of either 6%, 7% (Zurich’s recommended rate) or 8%. This can be changed at any time. Low start plans can only have a growth rate of 7%. The guarantee (i.e. that the maturity value is at least equal to the sum assured) is not available if the client chooses a higher assumed rate of investment growth than that recommended (i.e. 7%)
  • Variable Sums Assured, for greater flexibility the Homeowner Plan allows the target maturity value, the level of life cover and the level of Lifestyle Benefit to be different from each other. However, the life cover and Lifestyle Benefit cannot be less than the maturity amount and the Lifestyle Benefit cannot be less than the life cover. As the plan is a mortgage related product the life cover or Lifestyle Benefit cannot be greater than the outstanding mortgage amount.
  • Increases are available on all versions of the plan provided that contributions have not been suspended or are not being waived. Any increase will go through its own RAP allocation period.
  • Benefit Increase Option - the sum assured can be increased at any time throughout the term of the plan, subject to underwriting and an increase in the contribution, where the level of cover required is higher than for the MIO option.
  • Early Cash Facility (Partial Withdrawal) - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken. However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now. For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed. We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome.

If the plan is assigned to a lender, we must have the lender’s express written consent. Partial withdrawals may result in a reduction in the sum assured. The planholder cannot exercise the facility if contributions are being waived due to disability. The plan term may have to be extended.

  • Career Break/Stop Start Facility, client may miss up to 12 monthly payments, whilst still maintaining full life cover. The plan may be restarted by paying outstanding contributions or extending the term of the plan (Client may request Stop/Start), or Stop Start can be exercised due to non payment of contributions.

Requirements for Career Break/Stop Start Facility1. The cash - in value must be equal to, or in excess of 50% of the current years total contribution. No options allowed whilst plan is at Stop/Start status.

2. If plan has remained in Stop/Start for 13 months and is not reinstated, then :If value less than £1000 = Surrender, If value £1000 or above = Paid-up.

  • Mortgage Increase Option (MIO) is available to those accepted at standard rates or where only ratings by exclusion are present. MIO Enables the plan holder to increase the plan up to the greater of twice the underwritten sum assured or up to £60,000 to cover a new mortgage or further advance without further underwriting. Increases above these limits will be underwritten. The sum assured used to calculate the MIO is the Lifestyle benefit, if present, otherwise the death benefit will be used. Increases above this limit are available but must be underwritten.
  • Waiver of Contribution (WOC) contributions will be waived if the plan holder is totally disabled due to sickness or accident for more than three months, and is unable to earn a living from his usual occupation or one which is reasonably suitable for as long as he is disabled or until retirement age.
  • Continuation Option at the end of the term the planholder may extend the term for a further 10 years for mortgage purposes only.

Taxation and Trusts

Proceeds are tax free after 10 years, or 3/4 of the term, whichever is sooner, provided contributions have been paid in full. The Early Cash Facility is only tax free if taken after 10 years.

The policy can be written in trust.

Income Protection Plan (HA)

Non qualifying life assurance policy, introduced January 1986. The principal benefit is an annual income, which is paid monthly in arrears to the planholder if the life assured is unable to carry out their paid occupation due to illness or accident. The plan (and any benefit) ends at an age chosen at commencement known as Plan Termination Age - normally retirement age (minimum term = 5 years). Plan written as single life and client must be employed / self employed and U.K. resident.

Benefits, Funds and Units

Death – the benefit payable will be the cash value of policy (or annualised value of 1st years contribution, whichever is the greater)

At Plan Termination Age the Plan is automatically cashed in and proceeds paid to the plan holder

Income Benefit paid out to planholder after the deferred period has elapsed. Total Indexation, allows income benefit to increase in line with Average Weekly Earnings at policy anniversary date even if a claim is being paid. No further Underwriting is necessary and contribution level increases accordingly. If indexation is declined, the policy will revert to Indexation During Claim only

Indexation During Claim, the level of benefit remains unchanged until a claim is being paid. During this time, the level of benefit will rise on each policy anniversary date in line with AWE.Level Income Benefit

The plan allows the following maximum benefit levels : For plans with a Declaration Date of 22 July 1996 and before, 75% of earning up to £45,000 p.a. plus 33 33% of amount exceeding £45,000 p.a. and takes into account state benefits and other permanent health assurance.For plans with a Declaration Date of 23 July 1996 and thereafter, 65% of earnings up to £45,000 p.a. plus33 33% of amount exceeding £45,000 p.a. and takes into account state benefits and other permanent health assurance.

Claim Period

If the medical condition arises while the Life Assured is living abroad, in the event of a Claim, the Life Assured will be required to return to the United Kingdom or a country acceptable to the Company (the Geographical Limits) before a Claim commences. This means that the Income Benefit will become payable at the end of the Deferred period or the date of return to a country within the Geographical Limits, whichever is the later.

The plan will provide an income for as long as the Life Assured is unable to return to work because of illness or disability. Income payments will continue until any of the following occur; death of the Life Assured, their return to work, the end of the disability or the Plan Termination Age.

Upon return to work the contributions recommence but the following can apply:-

  • Proportionate Benefit - if the life assured is unable to do any part of old job and starts a different and lower paid job, a proportionate benefit is paid to make up the difference in earnings.
  • Rehabilitation Benefit - if the life assured resumes their previous job, in a reduced capacity at a lower income level, a rehabilitation benefit is paid to make up any difference in earnings. This benefit is paid for a maximum of 12 months from the date of returning to work.

Contributions are waived while either benefit is received.

Exclusions

There are three standard exclusions on the Income Protection Plan, in addition to self-inflicted injury.

  • War - Income Benefit is not payable if the disability is caused or continues directly or indirectly by War, Invasion, Hostilities (whether War is declared or not), Rebellion, Revolution, Insurrection by military or usurped power, Riot or Civil commotion.
  • Pregnancy - Income Benefit is not payable if the disability arises or continues directly or indirectly from pregnancy or childbirth, unless the disability lasts for more than 3 months after the end of the pregnancy. In this case the Income Benefit will be payable as if the Deferred Period started at the end of the 3 month period.
  • AIDS - Income Benefit is not payable if the disability arises or continues directly or indirectly from Human Immunodeficiency Virus or Acquired Immune Deficiency Syndrome.

Charges

Each month the following are deducted:
1. Renewal expense - will be increased in line with AWE.
2. Morbidity (waiver & claims expense)
3. Mortality deduction - an amount representing the risk of policyholder dying within the month.

  • Annual Management Charges - ¾% per year for policies commencing prior to 1/6/90 - reinvested to units, therefore in effect there is no charge. 1¼% per year for policies commencing after 1/6/90 - reinvested to units, therefore in effect there is no charge.
  • All units are invested in accumulation units. After the period of nil allocation, 100% of each contribution paid will be allocated to units. The period of nil allocation will depend on term, deferred period, occupation group etc. Contributions are allocated 100% to either Managed, Property, Gilt Edged or Fixed Interest Deposit. Plan holder can switch all of units allocated to plan from fund to fund, minimum value at time of switch £150, charge per switch, increased in line with Average Earnings Index.
  • Stopping Contributions, if the policy has attained a value it will be surrendered and the surrender value paid to the plan holder, if the policy has not attained a value it will lapse.
  • Policy Reviews, a first review is normally at the five year point but depends on term. A favourable review means the level of benefit and contributions remain unchanged, with the ‘good news’ being reflected in an increased cash level. An unfavourable review will result in a higher contribution to maintain the benefit level.

Options

  • Increases the benefit level can be increased subject to the maximum benefits provided, the policy version, and the deferred period remaining unchanged. Not available if a claim is in payment.
  • Partial Withdrawal available if the plan has attained a sufficient cash value. Minimum withdrawal £250 - subject to there being sufficient value left to support benefits until next review.
  • There is no facility to make the plan "paid up".
  • Amend deferred period allowable to meet changing needs of plan holder throughout career and/or on change of employment / occupation.

Taxation

From 6 April 1996 benefits payable are not taxable (subject to certain conditions being satisfied).

Lifeline (DB [L])

Qualifying, Whole of Life Critical illness plan.Available from 15 May 1989 to 14 February 1993

Minimum and Maximum Ages at Commencement

  • DBS Minimum 17 next birthday, Maximum 70 next birthday
  • DBF Minimum 17 next birthday, Maximum 60 next birthday

Benefits, Funds and Units

Provides benefits in the event of the Life Assured suffering from a specified "critical" illness that meets our plan definition and benefits, in the event of Permanent Total Disability Any Occupation before ages 65 for males, 60 for females. There is full Life Assurance protection in the event of death together with longer term investment benefits

  • Lifeline Benefit Payable - The sum assured or cash value whichever is greater. The Lifeline benefit can be removed from the Policy within two years from commencement. If removed, the Benefit can not be reinstated and the Policy will revert to an ordinary Adaptable Life Plan (DB).
  • The critical illnesses covered and their definitions are set out in the plan terms and conditions. If the medical condition arises while the Life Assured is living abroad, in the event of a claim, the Life Assured will be required to return to the United Kingdom or a country acceptable to Zurich (the geographical limits) before the benefit will be paid.
  • Unit Allocation - Monthly paid cases:, after up to 28 months nil allocation allocation will be at 100%. The month in which the first allocation takes place will depend on the life assured’s age next birthday at commencement. Yearly paid cases, Nil allocation will occur during any or all of 1st / 2nd / 3rd year depending on the life assured’s age next birthday at commencement. From the 4th year allocation will be at 100%. The percentage allocation is reduced if WOC applies.
  • Funds Available - Managed, Property, Gilt Edged and Fixed Interest Deposit, only one fund link available at any one time. Fund Switches, minimum value £500, fixed charge, increased each year in line with Average Weekly Earnings (AWE).
  • Policy Reviews - Initially after 10 years, then every 5 years. A favourable review will result in an increase in cover, an unfavourable review will result in an increase in contribution.
  • Charges - Annual Management Charge for plans commencing prior to 1/6/90 ¾% per annum: automatically re-invested by further unit allocation. Plans commencing after 1/6/90: 1¼% per annum: automatically re-invested by further unit allocation. Monthly Expense Deduction, Units are deducted equal to indexed/fixed policy amount both are in turn indexed.

Options

  • Stopping Contributions - If the plan has no value the plan will lapse, if the plan value is under £1000 the plan will be surrendered. if the plan value is over £1000 the Sum Assured Continuation (S.A.C.) option will apply. Under this option full life cover is maintained until the fund value is exhausted. (S.A.C. cannot be requested). Whilst the plan is in SAC it is possible to reinstate up to 13 months from date the last contribution was paid. In order to reinstate all missed contributions must be paid. Whilst in SAC the plan can be surrendered on request.
  • A plan can be increased at any time under benefit Increase option, the extra sum assured applied for is underwritten. The policy holder can increase the contributions (rather than the sum assured) on Extra Cover plans in order to increase the deferred sum assured.
  • Early Cash Facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken. However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now. For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed. We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. An amount equal to one contribution (monthly or annual depending on the chosen payment frequency) must be left in the fund. In case of Extra Cover plans where the life assured is 55 or over at the time of the Early Cash payment, then the minimum residual value is one year's contribution plus one payment - i.e. 13 months or 2 years depending on payment frequency). If the Early Cash Facility is taken within 10 years from commencement, it may give rise to a higher rate tax liability.
  • Reductions In Life Cover - Available on 10th anniversary and any subsequent anniversary, indexation benefit falls away but Waiver of Contribution remains.

Additional Benefits

  • Indexation - The sum assured can be increased every year in line with AWE.
  • Waiver Of Contribution Contributions will be waived in the event of the client becoming unable to work through sickness or accident.

Taxation and Trusts

Surrender Proceeds are tax free after 10 years contributions have been paid.

The policy can be written in trust.

Lifestyle (DH)

Non - qualifying term assurance available 17 June 1991 to 14 February 1993 Provides life assurance protection, benefits in the event of certain "dread" illnesses or the taking place of a lifestyle operation or Benefits in the event of permanent total disability before age 65 for males, 60 for females. The Lifestyle plan has no investment benefits.

Term

Any term can be chosen (minimum 5 years) provided the end of term falls before:
1. Life assured's 75th birthday where renewal option is not selected.
2. Life assured's 65th birthday where renewal option is selected.These limits apply to the older life for the joint life version. The maximum term available is 50 years where the renewal option is included. There is no maximum term where the renewal option is not included.

Benefits, Funds and Units

  • Death Benefit equal to the annualised value of 1 years contribution at the time of death. (First death on a joint life plan.)
  • Permanent Total Disability (PTD) Any Occupation - Provides for the Lifestyle benefit to be paid in the event of the life assured suffering Permanent Total Disability and being unable to follow any occupation for which they are considered suitable by way of knowledge, experience, qualifications, training or re-training. The disability must arise before age 65 for males or age 60 for females.
  • Lifestyle Benefit Payable on surviving 28 days (i.e. Deferred Period) from: 1. diagnosis of a Lifestyle illness (Critical illness that meets our plan definition) 2. the taking place of a Lifestyle operation 3. permanent total disability (before age 65 for males, 60 for females). On payment of the Lifestyle benefit the plan will terminate. If the life assured dies during the Deferred period, the death benefit will be paid out, not the Lifestyle benefit.
  • The critical illnesses covered and their definitions are set out in the plan terms and conditions. If the medical condition arises while the Life Assured is living abroad, in the event of a claim, the Life Assured will be required to return to the United Kingdom or a country acceptable to Zurich (the geographical limits) before the benefit will be paid.
  • Unit Allocation - After a nil allocation period, 100% of the contribution paid will be allocated to units excluding that for Renewal or WOC. The period of nil allocation will depend on age, sex, smoker status, term etc. Unit allocation is only to keep the plan "on track". There is never any cash - in value. There is no choice of funds for the client.
  • Policy Reviews - Regular reviews take place to ensure that throughout the term that the policy is 'on track' - based on actual morbidity and mortality experience, expenses and investment return. The frequency of the reviews depends on the term, but will generally be held on every 5th anniversary plus the last 4 anniversary points prior to end of term. Shorter term plans will have earlier reviews. A favourable review will result in an increase in cover, an unfavourable review will result in an increase in contribution.
  • Charges each month units are deducted to cover renewal expenses equal to the Indexed/fixed policy amount (increased in line with Average Weekly Earnings (AWE).
  • Stopping Contributions the policy will automatically lapse after 30 days grace - life cover will cease.

Options and Benefits

  • Waiver Of Contribution Benefit (WOC) Can only be incorporated at commencement. If the life assured becomes disabled and unable to earn a living from their normal occupation for more than three months, then the contribution will be waived for as long as they remain disabled or until normal retirement age, or the end of the term of the plan, whichever is the sooner.
  • Renewal Option can only be incorporated at commencement, and is available to standard lives only. This option allows the plan holder to renew the plan at the end of the term for a further period regardless of their state of health at that time.
  • Indexation the Lifestyle benefit is automatically increased on the policy anniversary date and in line with AWE. This benefit will fall away if indexation is declined.
  • Increases the Lifestyle benefit can be increased at any time, subject to underwriting.
  • Mortgage Increase Option (MIO) enables the plan holder to increase the plan up to twice the underwritten Lifestyle benefit or to an amount of £60,000 (whichever is greater), to cover a new mortgage or further advance, without further medical evidence. (The option also allows the term to be extended if necessary.)

Taxation and Trusts

As the policy offers no investment potential there is never any tax liability.The policy can be written in trust.

Lifestyle Plus (DM)

A Non-qualifying Whole of Life Critical Illness Plan available 15th February 1993 to 19 July 2004.

The purpose of the plan is to provide:
1. Benefits in the event of the life assured suffering from a specified "critical" illness that meets our plan definition.
2. Benefits in the event of permanent total disability any occupation before age 65 for males, 60 for females (see optional benefits).
3. Benefits in the event of a child of the life assured between ages 3 and 18 years suffering from a specified "critical" illness that meets our plan definition (see children's benefit).
4. Nominal life assurance protection equal to one year’s current contribution (see optional benefits).
5. Longer term investment benefits.

Versions

  • Maximum Cover (not available on plans with a declaration date later than 16 June 2003) Provides maximum cover for first 10 years of plan and reduced level thereafter. The level of cover in force at the 10 year point may be maintained for a further 10 years for an increased premium at the 10th anniversary.
  • Extra Cover (not available on plans with a declaration date later than 16 June 2003) Provides extra cover (but not maximum) for first 10 years and a reduced level thereafter. The level of cover in force at the 10 year point may be maintained for a further 10 years for an increased premium from the 10th anniversary.
  • Lifetime Protection Provides level cover throughout policy life (subject to indexation and reviews).

Benefits, Funds and Units

  • The critical illnesses covered and their definitions are set out in the plan terms and conditions. If the medical condition arises while the Life Assured is living abroad, in the event of a claim, the Life Assured will be required to return to the United Kingdom or a country acceptable to Zurich (the geographical limits) before the benefit will be paid.
  • Children's Benefit is payable in the event of a natural or legally adopted child of the life assured suffering from a specified "critical" illness that meets our plan definition. The child must be between the ages of 3 years and 18 years and the benefit payable will be the lower of the sum assured or £15,000. It can be claimed only once per child, but can be paid more than once i.e. on each child of the life/lives assured.
  • Funds Available - Initial allocation to fixed interest, during the nil allocation period (See below) Automatic switch to managed once units become positive (i.e. at the next month end). Switching to 100% managed, property, gilt edged or fixed interest then allowed. Minimum switch value £500. There is a fixed switch charge, which is increased in line with Average Weekly Earnings (AWE).
  • Charges - Units are deducted each month for mortality, morbidity, additional morbidity and occupation PTD (dependent on benefits applied for). A Nil Allocation Period depends on age next birthday, sex, smoker status and initial/deferred sum assured ratio.

The annual management charge is 1¼% of the fund value, which is reinvested.

  • Policy Reviews - The first contractual review of maximum cover and certain extra cover plans will be after 5 years. There will be a right to review in years 6 to 9, after which reviews will occur at year 10, then every 5 years until age 70, then annually. Lifetime protection and other extra cover plans will have their first review at the 10th anniversary, after which reviews will occur every 5 years until age 70, then annually. A favourable review means an increase in cover whilst an unfavourable review will result in an increase in contribution.

When are the Proceeds Payable?

  • Lifestyle Benefit - Payable on surviving 28 days (the Deferred Period) from diagnosis of a "critical" illness that meets our plan definition unless full life cover applies, in which case payable immediately (no Deferred Period). On payment of the Lifestyle benefit, the plan will terminate.
  • Death Benefit - Full or nominal Death Benefit is payable on the death of the life assured (or first death on a joint life case). On payment of the Death Benefit, the plan will terminate.
  • Surrender Value, payable if encashment is requested by the Policy Owner(s).

Options

  • Stopping Contributions - If the cash value is greater than £1000 the plan will be put to Sum Assured Continuation. This cannot be requested, and is only as a result of non-payment of contributions. If the cash value is less than £1000 the policy will be surrendered. If there is no cash value the plan will lapse.
  • Sum Assured Continuation (SAC) This involves the continuation of the sum assured following the termination of contributions for as long as monthly unit deductions can be taken. Once the fund has been exhausted, the policy is lapsed. The minimum value to qualify for SAC is £1000. Plans can only be reinstated from SAC on payment of up to 13 months of missed contributions.
  • Surrender - Plan can be surrendered at any time for the full bid value of units in fund. There are no surrender charges
  • Contribution Only Increase option applies to the maximum and extra cover versions only. The contribution and deferred sum assured are increased. The option is not underwritten, apart from any WOC element.
  • Benefit Increase Option can apply to all versions of the plan. The sum assured is increased and the contribution increases accordingly. This option is subject to underwriting.
  • PTD Own Occupation can be added to the plan subject to underwriting. The option is not available if the option previously applied to the plan and was been removed.
  • Full Life Cover can be added to the plan subject to underwriting. The option is not available if the option previously applied to the plan and was been removed.
  • Reductions are available by concession to reduce contribution or sum assured, remove PTD own occupation, full life cover or additional critical illness cover.
  • Early Cash Facility - The immediate effect on the Sum assured is a like for like reduction in line with the value of the partial taken. However a further proportion of the sum assured will be reduced at the next review based on the % of the current value they take now. For example if you take 50% of your value as a partial your sum assured can potentially reduce by an equivalent 50% when the next review is completed. We won’t know the full affect of the partial on the next review until the review takes place, other factors such as fund performance (which we are unable to predict) will also contribute to the review outcome. The minimum remaining value must be equal to at least one regular contribution (either yearly or monthly).

In the case of Maximum or Extra Cover plans where the Life Assured is 55 or over at the time of the early cash payment, the minimum residual value is one year's contribution plus one payment (i.e. 13 months or 2 years depending on payment frequency).

Optional Benefits

  • Full Life Cover - The client can select full life cover, where the life cover is equal to the critical illness sum assured, for an additional contribution, otherwise life cover (nominal) will be equal to one year's current contribution.This benefit can be added (subject to underwriting) or removed after commencement, but once removed, it cannot be subsequently added again.
  • PTD Own Occupation provides benefits in the event of permanent total disability from the occupation declared on the application form (or a new occupation in the same risk), up to age 60 for both males and females for an additional contribution.The benefit can be added (subject to underwriting) or removed after commencement, but once removed, it cannot be subsequently added again.
  • Indexation the Lifestyle benefit (and death benefit if full life cover applied for) will be automatically increased each year in line with the AWE. This benefit is only available from commencement. The benefit can be removed after commencement, but once removed cannot be subsequently reinstated.
  • Waiver Of Contribution, premiums will be waived in the event of the life assured becoming unable to work through sickness or accident for more than 3 months. Waiver will continue until return to work or, normal retirement age, whichever is soonest. This benefit is only available from commencement. The benefit can be removed after commencement, but once removed cannot be subsequently reinstated.

Taxation and Trusts

Lifestyle and death benefit will not attract any tax liability. There may be a tax liability for higher rate tax payers on the surrender proceeds if a gain is made, as the policy is non-qualifying.

The policy can be written in trust.

Maximum Protection Plan (CB)

Whole of life plan available from 1 June 1975 to July 1985. Provides a high level of life assurance protection and long term investment potential written as single life only.

Benefits, Funds and Units

Proceeds payable upon death or encashment, the Death Benefit is the guaranteed sum assured or the cash - in value whichever is the greater.

Unit Allocation

  • Life Managed Fund Only.
  • A proportion of each premium is invested from the 2nd year onwards (allocation takes place at the offer price)

-Year 1 0%
- Year 2 50%
- Year 3 75%
- Year 4 and over 90%

Unit allocation may be reduced from year 3 onwards for clients who are over 45 NB at commencement

Charges

  • ¾% Annual Management Charge.
  • Stopping Contributions, if the cash value is £500 or more the policy will be made Paid-up, if the cash value is less than £500 the policy will be surrendered and the surrender value paid to the policy holder. There are no surrender charges

Additional Benefits

Waiver Of Contribution, if life assured is unable to work for more than 3 months, contributions will be waived for as long as he is disabled, up to age 60N.B. WOC is automatically included on Maximum Protection Plans, providing the client is accepted at standard rates, and is less than 45 years old at commencement.

Options

There are no set tenth anniversary options, nor any facility to increase the life assurance protection, take withdrawals or partial surrenders.

In order for the plan to be made paid up the cash value of the policy must be £500 or more. Life Assurance Protection becomes a percentage of the cash - in value with the percentage depending on the age of the life assured at the point of death (never less than 101%)

Optional Additional Life Cover

In the event of death during the first ten years, an additional sum assured will be payable in addition to the death benefit. At the end of each ten years the planholder may renew the RCT benefit for a further ten years, at the same level of benefit, without further medical evidence. While this benefit is in force, the planholder may convert the benefit to a Whole of Life policy, providing life cover only, (for a sum assured not exceeding the RCT figure) without further medical evidence. Minimum amount of RCT = £1000 (The premium in respect of the RCT is not allocated to units)

Taxation and Trusts

Proceeds are tax free after ten years providing contributions have been maintained.

The policy can be written in trust.

Mortgage Protector (DT) pre 16/09/02

The Allied Dunbar Mortgage Protector was available from 19 November 2001 to 15 September 2002 is a non-qualifying unit linked life assurance plan designed specifically for mortgage protection not as a general protection plan. The plan can be set up on a single life (DTS) or joint life (DTF) basis, for residents of the United Kingdom, who intend to remain resident.

Term

Any term to coincide with the mortgage (subject to a minimum term of 10 years and a maximum term of 35 years) provided that the end of the term falls before the life assured’s 66th birthday (on joint life plans the older life’s 66th birthday).

Age Range

The minimum age for the life assured is 17 next birthday (for each life on a joint life plan). The maximum age at commencement is 66 next birthday minus term.

Benefits

The major benefits, which are automatically included in the plan, are:

1) Life Cover equal to the mortgage amount, subject to a maximum of £400,000, which will be paid in the event of death of the life assured.

2) Lifestyle Benefit equal to the life cover, subject to a maximum of £400,000, which will be paid in the event of the life assured being diagnosed or undergoing of a Lifestyle condition or operation.

3) Payment Protection Benefit is a monthly income equal to 1% of the Life Cover/Lifestyle Benefit payable if the life assured is unable to work through sickness or disability. The income benefit will start 6 months after the disability starts. This period is called the deferred period.

Options

  • The plan incorporates a Mortgage Increase Option, which enables the life or lives assured, subject to certain conditions to increase the Life Cover/Lifestyle and, where appropriate, extend the term, without further medical evidence.
  • The plan allows free cover from the later of application acceptance and exchange of contracts to the earlier of completion and three months from acceptance.
  • The plan has a Guaranteed Insurability Option which allows the client, at the end of the mortgage term, to transfer the life cover and Lifestyle benefit under the Mortgage Protector to a Lifestyle Plan, with full life cover, without the need for further underwriting.
  • The life assured can choose to increase the benefits under the plan at anytime and have the increase incorporated within the original plan. This avoids any further plan charges. These increases are subject to underwriting and an increase in contribution.

Taxation and Trusts

As the policy offers no investment potential there is never any tax liability.The policy can be written in trust.

Mortgage and Family Protector (DT) post 15/09/02

The Allied Dunbar Mortgage & Family Protector was available from 16 September 2002 to 29 February 2004, is a non-qualifying unit linked life assurance plan designed for mortgage and/or family protection. The plan can be set up on a single life (DTS) or joint life (DTF) basis, for residents of the United Kingdom, who intend to remain resident.

Term

The client may select any term (subject to a minimum term of 10 years and a maximum term of 35 years) provided that the end of the term falls before the life assured’s 66th birthday (on joint life plans the older life’s 66th birthday). Where the plan is for mortgage protection (subject to the above minimum and maximum) the term should coincide with the term of the mortgage.

Age Range

The minimum age for the life assured is 17 next birthday (for each life on a joint life plan). The maximum age at commencement is 66 next birthday minus term.

Versions

  • High Cover (introduced 17 February 2003) - the client pays a lower initial contribution which is based on the clients then age and term. The contribution will increase annually throughout the term of the plan, with the increased contribution being based on the client’s age and the term remaining on each anniversary.
  • Standard version – the client pays a premium based on the anticipated cost of providing the cover throughout the term of the plan. This is reviewed from time to time. The timing and frequency of reviews depends on the term of the plan. In general, reviews will take place on every fifth plan anniversary and on each of the last four anniversaries before the end of the term. Shorter term plans will have earlier reviews. A review on this plan version may result in more cover being provided for the same premium (good news review), a higher premium being required to maintain the same level of cover (bad news review), or no change being made to the premium/cover level at all.

Benefits

The major benefits, which are automatically included in the plan, are:

1) Life Cover, up to a maximum overall amount of £400,000, which will be paid in the event of the death of the life assured. Where the plan is being used exclusively to protect a mortgage the life cover will be limited to the mortgage amount subject to an overall maximum of £400,000. Where the plan is being used in part or whole for family protection purposes the maximum benefit will be restricted to four times the life assured’s salary (or joint incomes for Joint Life plans) subject to an overall maximum of £400,000.

2) Lifestyle Benefit equal to the life cover will be paid in the event of the life assured being diagnosed or undergoing of a Lifestyle condition or operation.

3) Payment Protection Benefit is a monthly income equal to 1% of the Life Cover/Lifestyle Benefit payable if the life assured is unable to work through sickness or disability. The income benefit will start 6 months after the disability starts. This period is called the deferred period.

Options

  • The plan incorporates a Mortgage Increase Option, which enables the life or lives assured, subject to certain conditions to increase the Life Cover/Lifestyle and, where appropriate, extend the term, without further medical evidence.
  • The plan has a Guaranteed Insurability Option which allows the client, at the end of the term, to transfer the life cover and Lifestyle benefit under the Mortgage & Family Protector to a Lifestyle Plan, with full life cover, without the need for further underwriting.
  • The life assured can choose to increase the benefits under the plan at anytime and have the increase incorporated within the original plan. This avoids any further plan charges. These increases are subject to underwriting and an increase in contribution.
  • If the plan commences before the client’s mortgage comes into force, the cover will be maintained at the end of the term for up to a further 6 months to match the original mortgage if it is still in place.
  • If the plan commences before the client’s mortgage comes into force, the cover will be maintained at the end of the term for up to a further 6 months to match the original mortgage if it is still in place.

Taxation and Trusts

As the policy offers no investment potential there is never any tax liability.The policy can be written in trust.

Renewable Convertible Term Plan (CA1)

A 10 Year Term Assurance plan available from March 1976 to January 1987, providing life assurance protection only there is no investment benefit. Written as single life only.

Benefits, Funds and Units

The guaranteed level of life cover is paid upon death during the term of the policy providing contributions have remained paid to date.

Stopping Contributions

The plan will automatically lapse without a value and the life assurance protection will cease. Providing life assured is living and has not attained age 65 then irrespective of their health, at that time, the life assurance can be:

  • Renewed at the end of the Term for a further 10 year period
  • At any time during the Term, convert the plan into a Whole of Life plan providing life cover only for a sum assured not exceeding that of the RCT policy.

Taxation and Trusts

As the policy offers no investment potential, there is never any tax liability. The death benefit will be tax free.

The policy can be written in trust.

Self Employed Life Plan (CA2)

Availability of contracts

CA2 : 01.01.74 to 31.12.84

This is a term assurance plan approved under Section 226A of Income and Corporation Taxes Act 1970, now sections 619-627 of ICTA 1988, (Term Assurance under a Retirement Annuity Contract). The purpose of the plan is to provide Term Assurance cover only.

The term of the plan was chosen at outset between ages 60-75.

These plans were available to the Self Employed and Employees in non pensionable employment.

Contributions are paid gross and any tax relief must be claimed direct from the Inland Revenue by the plan holder normally via their annual Tax Return.

Charge Structure

There is a service premium payable on all monthly paid plans and is calculated as 3% of the contribution.

Benefits

A guaranteed Sum Assured payable upon the death of the planholder within the term of the plan.

Flexibility

  • No stop/start facility exists, if contributions are stopped the plan will lapse with no residual value on the plan. It is not possible to reinstate the plan if it has lapsed.
  • There is no provision to increase the sum assured. Contributions above the original level, increases were effected by taking out a new plan.

Additional Benefits

There is an option to convert the Sum assured to a new plan without any further underwriting at any time during the term of the plan, using part or all of the Sum Assured. The contribution to the new plan will be calculated based on the clients age at the time of conversion.

Tax Advantaged Life Assurance (TALA FA)

Available April 2006 to 6 September 2006.

Plan Type

Term assurance under pension plan rules. There are two versions of the product:

  • Level or Decreasing

Tax

Tax Premiums are paid net of basic rate tax. Higher rate taxpayers can claim additional relief.

Trusts

Established under a Master Trust, the Trustee is Zurich Pension Trustees Ltd. Clients can complete a nomination of Beneficiary form. The plan can also be written in an individual trust.

Sum Assured/Payment Changes

There is no facility to amend the sum assured or premium.

Whole of Life Plan (CD)

Provides life cover at a high level and investment benefits over the medium to long term, written as single life, joint life 1st death or joint life 2nd death. Available 1st February 1977 to 22nd February 1983

Benefits, Funds and Units

  • Proceeds Payable Upon 1st or last death (depending on the written basis – see above) or earlier encashment. Death Benefit is the sum assured or cash - in value, whichever is higher.
  • Funds Available 100% to; Managed, Gilt Edged, Property or Fixed Interest Deposit
  • Fund Switches
    - Minimum = £500
    - Charge = ½% of bid value of all units switched
    - Future allocation is to the most recent generation of the chosen fund

Unit Allocation

  • Single Life / Joint Life 1st Death Monthly paid = 95%, Yearly Paid:1st and 2nd Year dependant on Age Next Birthday and 3rd year is 95%
  • Joint Life 2nd Death Monthly paid = 92.5%, Yearly paid:1st & 2nd year dependant on Age Next Birthday and 3rd year : 92.5%

The date of allocation is dependant on the life assured’s Age Next Birthday and the payment frequency of the policy.

Mortality deductions are based on charts produced by the Institute and Faculty of Actuaries not on our own mortality experience.

Policy Reviews

  • Frequency: The first plan review will take place after 10 years. Subsequent reviews will take place at 5 yearly intervals and annually once the life assured (older life for joint life plans) reaches age 70.
  • Favourable Review: Will result in either an increased sum assured or reduced premium.
  • Unfavourable Review: Will result in either an increased premium or reduced sum assured.

Policy assumes 7.5% growth.

Charges

  • Service Premium – If net premium less than £42.50 pm/£425 pa, a £1 pm/£10 pa gross charge will apply.
  • ¾% annual management charge
  • Stopping Contributions, if the cash-in value is greater than £1000 the Policy will be made paid up, if the cash-in value is less than £1000 the Policy will be surrendered but see also the Paid-up Term Option below. There are no surrender charges.

Additional Benefits

  • Guaranteed Insurability Option Benefit (GIOB) - Additional life cover available every 3 years at standard rates. The additional cover is provided by an further policy, with the sum assured being determined by the lesser of the amount specified on the original Policy Schedule, or the amount that could be provided by the minimum premium at the time the option is exercised.
  • Waiver Of Premium Benefit (WOC) - Premiums will be waived if the life assured is unable to work due to accident or sickness up to age 60 female, 65 male. NB WOC is not available on Joint Life 2nd Death plans.

Options

  • Increases - Unless a policy has a Guaranteed Insurability Option Benefit, increases are not available
  • Partial Surrenders - Available on plans taken out after February 1981, where the Fund value exceeds £5000, and the policy has been in force for a minimum of 10 years.
  • Annual / bi-annual withdrawals are available but must be requested by client and cannot be set up automatically on the system. The necessary changes will be made on the next anniversary date following the date on which the request to take partial surrenders is received. The contribution level reduces to £1 pa and the sum assured to £50.00 (or cash value if greater).
  • Paid Up Benefits - In order for the policy to be made paid up the fund value must exceed £1000. The Sum assured becomes a percentage of the value of units allocated to the policy and is dependant on the clients age at death (but will never be less than 101%).
  • Paid Up Term Option (PUTO) - For PUTO to be available the fund value must exceed £1000 and the policy must have been in-force for 4 years or more and the option must be requested by the policy holder. Under this option contributions cease and the cash-in value is used to provide either the original level or reduced life cover until the cash-in value has been extinguished. For Joint Life Second Death plans PUTO is only available after one of the Lives Assured has died. Where PUTO has been exercised the policy cannot be reinstated. It is possible to surrender the policy (on request) whilst PUTO is in operation.

Taxation and Trusts

Policy proceeds are tax free after ten years. If the policy is cashed-in or made paid-up before the ten year point, the client will be potentially liability to higher rate tax.

The policy can be written in trust.