Provider: Scottish Provident Product: Self Assurance Mortgage Benfits: The plan offers the f...
Provider: Scottish Provident
Product: Self Assurance Mortgage
Benfits: The plan offers the following choice of benefits:
Death benefit.
Death or earlier critical illness benefit.
Critical illness benefit.
Disability income benefit (sickness, accident and disability).
Unemployment benefit (including premium payment benefit.
Premium payment benefit (sickness, accident or disability).
Combination of benefits: More than one of the same benefits can be chosen. For example, an assured could have a decreasing death benefit to protect their mortgage and a death benefit which pays out an income to their family ' all within the same plan.
Minimum acceptable age at commencement: 18
Maximum acceptable age at commencement: Depends on the benefit selected:
Benefit Max age when Max age
taken out (or at end of
benefit increased) benefit term
Death benefit 79 85
Death or earlier critical 69 85
illness benefit
Critical illness benefit 69 85
Disability income benefit 59 65
Unemployment benefit 59 65
Premium payment benefit 59 85
If renewable death, death or earlier critical illness, critical illness or disability income benefit is chosen, the maximum age when benefit can be taken out is: the maximum age at the end of the benefit term minus twice the renewable term, or the maximum age when benefit taken out, as shown above, if lower.
Minimum policy term: It is up to a policyholder how long they want to be covered for. Each benefit chosen can have a different term. If the assured knows how long they want a benefit to last, they can choose a fixed term, for example, if using the benefit to cover a mortgage. However, for more flexibility they can choose one of the renewable options.
Fixed term: There are minimum and maximum fixed terms for all benefits. The minimum term for all benefits is five years. The maximum term available is 40 years or the term to the maximum age at the end of the benefit term if lower. For example, if aged 33 when taking out disability income benefit, the maximum term available is 32 years. Unemployment benefit, decreasing lump sum and income death or critical illness benefits are only available with a fixed term.
Maximum expiry age: Maximum age varies depending on the benefit selected:
Benefit Max age when Max age at end of
taken out (or benefit benefit term
increased)
Death benefit 79 85
Death or earlier critcal 69 85
illness benefit
Critical illness benefit 69 85
Disability income benefit 59 65
Unemployment benefit 59 65
Premium payment benefit 59 85
If renewable death, death or earlier critical illness, critical illness or disability income benefit is chosen, the maximum age when benefit can be taken out is: the maximum age at the end of the benefit term minus twice the renewable term; or the maximum age when benefit taken out, as shown above, if lower.
Maximum term (years): Maximum term available is 40 years or the term to the maximum age at the end of the benefit term if lower. Unemployment benefit, decreasing lump sum and income death or critical illness benefits are only available with a fixed term.
Monthly policy fee: No
Life cover is offered as an option: There is a choice of the following benefits:
• Death benefit.
• Death or earlier critical illness benefit.
• Critical illness benefit.
• Disability income benefit.
• Unemployment benefit (including premium payment benefit (unemployment).
• Premium payment benefit (sickness, accident or disability).
Level critical illness benefit: Yes, the amount of benefit payable will be the same as the amount chosen at the start.
Decreasing critical illness benefit: Yes. This benefit will reduce over the term chosen to fit in with a loan reducing as part of the capital is paid each month. The amount payable will be the amount left at the time of claim. The interest rate chosen by the policyholder (between 0% a year and 18% a year) is used when working out how the benefit is going to reduce over the term.
Waiver of premium available: Premium payment benefit (sickness, accident or disability). This benefit protects premiums if, because of sickness, an accident or disability, the policyholder is, in the opinion of Scottish Provident, unable to work or do a number of work or life tasks.
When the benefit is selected the proposer may select the deferred period they require: four weeks (if disability income benefit selected); 13 weeks; 26 weeks; or 52 weeks.
Mortgage interest waiver option: Disability income benefit (sickness, accident or disability). This benefit will give a monthly tax-free income if, because of sickness, an accident or disability, an assured is, in the opinion of Scottish Provident, unable to work or do a number of work tasks. Scottish provident will automatically include premium payment benefit (sickness, accident or disability) if this benefit is chosen.
Unemployment cover option: This benefit can only be chosen to protect mortgage or loan repayments.
This benefit is made up of two parts: it will give a monthly tax-free income if the policyholder becomes unemployed through no fault of their own, and premium payment benefit (unemployment) will take care of the premiums while receiving monthly benefit.
The level of cover can be chosen. However, the following limits apply:
• Minimum benefit of £100 a month.
• Maximum benefit of 12.5% of the mortgage amount. This maximum cannot be for more than 50% of salary (50% of lower salary if a joint-life benefit). Scottish Provident will not pay more than£1,500 a month. This limit also takes into account all other accident, sickness and unemployment plans with other providers.
Automatic sum assured indexation available: Yes. Benefit will increase each year by the increase in the RPI.
However, it will not increase by more than 10% each year. The premium for that benefit will increase by the increase in the RPI multiplied by 1.4. Benefit will increase on the policy anniversary after cover starts. For benefits added or increased during the year, the first increase will apply less than a year from it starting and then each year after this. Scottish Provident will work out the increase in the RPI over the year ending three months before the policy anniversary. If the rate of inflation drops below zero, the rate will be zero.
Guaranteed insurability options: If the plan has been accepted at ordinary rates there are a number of increase options which allow an increase in the amount of benefits within certain limits, and in these circumstances only a short declaration of continued good health needs to be signed. The increase will be set up using the same basis as the original benefit and it will end at the same time. The premium covering the increase will be based on age and rates which apply at the time.
The person covered can increase death, death or earlier critical illness, critical illness and disability income benefits by up to 50% of the original benefit amount. However, the increase cannot be for more than:
• £150,000 or lump sum benefits.
• £8,000 a year for disability income benefits.
Increase options available until age 55 (first life to reach 55 if joint-life benefit is chosen).
If the original plan includes premium payment benefit (sickness, accident or disability) this will be automatically included in the increase as long as there is no claim either in the course of being paid or waiting to be paid.
Permanent health insurance option: Disability income benefit (sickness, accident or disability). This benefit will give a monthly tax-free income if, because of sickness, an accident or disability, the policyholder, in the opinion of Scottish Provident, is unable to work or do a number of work tasks. Premium payment benefit (sickness, accident or disability) will be automatically included if this benefit is chosen.
Regular income facility available: Yes. The planholder can choose to have death or critical illness benefit paid as a tax-free income. This can be on a level or increasing basis. The income received each year is chosen at outset. After a claim is accepted benefit will be paid monthly and will continue until the end of the benefit term.
• Level ' the amount of benefit chosen will stay at that level for the rest of the term.
• Increasing ' benefits will increase each year by the increase in the Retail Price Index (RPI). Benefit will continue to increase while a claim is being paid.
If, when making a claim, the planholder does not want to receive an income and would prefer to receive money up-front as a lump sum, some or all of the income can be changed to achieve this.
Scottish Provident will work out the lump sum based on the terms at the time, which will allow the benefit to be paid early. In the event of death while a critical illness income benefit is being paid, the representatives will have the choice of continuing to receive the income to the end of the benefit term or they can change the income left into a lump sum.
Guaranteed rates available: If level benefits have been chosen the premium will not change throughout the term chosen. If increasing benefits are chosen, the only change made to premiums is as a result of the increases
each year.
Number of years before the first premium review: Five years
