Protection menu Overview: Protection Menu is a menu-based protection product which offers: • Lev...
Protection menu
Overview: Protection Menu is a menu-based protection product which offers:
• Level life cover
• Level life cover with accelerated critical illness (CI) cover
• Decreasing life cover
• Decreasing life cover with accelerated CI cover
• Family income cover
• Family income cover with accelerated CI cover
• Income protection (IP) cover with or without additional CI cover
The plan aims to top up income if a child is diagnosed with a listed critical illness, the life assured is unable to work or maintain a houseperson's role due to disability, the life assured becomes unemployed, or the life assured takes time off work to care for a sick child, resulting in lost earnings.
Carers benefit: Provided the relevant plan remains in force and all premiums due have been paid a lump sum of four times the monthly IP benefit (increased, if appropriate, under the provisions of the index-linked benefits condition of this plan) or £25,000 per plan, if less shall be payable if any natural or legally adopted child of the life insured suffers from or undergoes any of the following conditions or types of surgical operation: Aorta graft surgery, bacterial meningitis, benign brain tumour, blindness, cancer, coronary artery bypass surgery, heart attack, heart valve replacement or repair, kidney failure, deafness, loss of independent existence, loss of limbs, loss of speech, major organ transplant, motor neurone disease, multiple sclerosis, paralysis/paraplegia, stroke.
Maximum age at attained at entry: 59
Minimum acceptable monthly premium: The minimum premium is £7.50 per month (£75 per year). This minimum applies at plan level.
Maximum annual benefit available: Calculated as follows - lesser of £125,000 or 50% of annual income plus P11d benefits minus other continuing income.
Retirement age: Cover ends between age 50 and 65 but no later than the planned retirement date of the life insured.
Monthly policy fee: There will be one plan fee of £2.50 per month or £25.00 per year, regardless of how many covers are included in a single or joint life plan.
Policy fee indexed automatically: The policy fee is fixed at the outset for the term of the plan.
Decrease term after start date: The term of the plan can be decreased subject to a minimum remaining term of five years.
Guaranteed insurability options (GIOs) available:
If the life assured is under 55, has been accepted on standard rates and was in good health when the cover was originally underwritten, we will include the following GIOs, which will enable the planholder to increase the benefit amount at any time without any further underwriting on the occurrence of the following special events:
• Career change or salary increase option - maximum increase allowable increase in salary or 50% of existing benefit to a maximum of £8,000 per year.
• Marriage - maximum increase allowable is 50% of existing benefit to a maximum of £8,000 per year.
• Childbirth/adoption - maximum increase allowable is 50% of existing benefit to a maximum of £8,000 per annum.
• Mortgage - purchase of a new property or increase in mortgage loan due to home improvements. The maximum increase allowable at any one time is the lesser of the increase in the annual mortgage repayment amount, 50% of the existing benefit and £8,000 per annum.
Premiums automatically increase on each cover anniversary: The amount of the increase will depend on the amount of increase in cover, the age of the person covered at the time of the increase, the remaining term of the cover, the rate we charged at the date cover started, where premium rates are banded and the amount of the original benefit.
Age used when costing indexation increases: Where the indexation option has been selected, premiums will automatically increase on each cover anniversary.
The amount of the increase will depend on the amount of increase in cover; the age of the person covered at the time of the increase; the remaining term of the cover; the rate charged at the date cover started; where premium rates are banded; and the amount of the original benefit.
Reviewable premium rates: Guaranteed premium rates for the first five years then reviewable at any time after the fifth anniversary of the cover. A review may result in premiums going up or down. The premiums may only change on a cover anniversary.
Career break: Upon receipt of written notification of the life assured taking a career break, Royal Liver will allow the IP cover to continue but with the level of cover reduced to the lesser of the main IP benefit or the maximum permitted for houseperson's benefit.
• While the life assured is on a career break, if they make a claim Royal Liver will assess it using activities of daily working.
• Premiums will still be based on original rates but may be reduced during a career break to reflect the reduced benefit amount.
• The original deferred period(s) will remain in place.
• If the life assured returns to work within two years of starting the career break, they can increase the cover back to the original level without any health-related questions from Royal Liver, providing a claim has not been made during the career break.
However, if the life assured returns to work after two years, Royal Liver may ask for evidence of their health.
Houseperson cover available: A houseperson is someone who does not work but still requires protection to cover a mortgage or other bills. In this instance, the maximum benefit is £15,000 per year.
Relapse benefit: If another claim arises for the same reasons as the initial incapacity within 12 months of the life assured returning to work, a deferred period will not apply.
Payment of premiums must be resumed upon returning to work.
Relapse benefit applies to all cases including those where inflation protection has been selected.
In the event of a claim, the benefit while in claim will escalate.
If the life assured then relapses and opens up the previous claim, the future benefits in payment will not revert to the level of original benefit before the claim, but will begin where the previous claim ended.
This applies even if inflation protection has existed previously and then been switched off before the claim started.
Benefit payable during unemployment: Unemployment break - upon receipt of written notification of the life assured's unemployment, the income protection cover and premiums will be suspended.
The life assured cannot make a claim during an unemployment break. If the life assured returns to work within 12 months of first becoming unemployed, they can reinstate the original level of income protection cover without any health related questions.
However, if the life assured returns to work after 12 months, we may ask for evidence of their health.
Permanent total disability benefit available: Lifestyle support benefit - if the life assured fails three out of the nine following activities of daily working at the end of the deferred period, then a one-off lump sum benefit of three times the monthly income protection benefit becomes payable at that time:
• Walking
• Mobility
• Dressing
• Communicating
• Reading
• Writing
• Eating
• Hygiene
• Continence
Where the life assured has more than one deferred period the assessment is made at the end of the longest deferred period.
Maximum % of income insurable: The maximum Benefit available is calculated as follows - lesser of £125,000 or 50% of annual income plus P11d benefits minus other continuing income.
Two deferred periods in one plan: Multiple instances of income protection can be set up for a life assured on a single plan, provided they are all either guaranteed or reviewable, all either with or without inflation protection, for the same term and have different deferred periods.
The total benefit across all split deferred periods must not exceed the maximum based on annual income.
• umber of exclusions applying to the plan: The exclusions applicable to income protection cover are:
• Pregnancy
• HIV / Aids (except where contracted as a result of having a blood transfusion, a physical assault or performing normal occupational duties)
• Living outside the stated geographical limits.
Analyst's comment
The Protection Menu from "virtual company" Progress from Royal Liver has proved a great success with its solid product and seamless end-to-end online only proposition.
The income protection element of the plan provides all the must-have features such as choice of premium rate type and an own occupation definition of disability.
A range of deferred period of between four and 52 weeks is offered and premiums can be waived after four weeks, irrespective of the deferred period.
Cover is available up to £125,000 per annum. The maximum benefit calculation is straightforward, based on 50% of income with no deductions for state incapacity benefit or pension income.
Some interesting innovations have been included, which is refreshing for an area of protection which has continually suffered from lack of imagination in product development.
Carers benefit creates a direct link to the family by extending the cover to provide a lump sum benefit if one of the insured's children suffers from certain defined conditions or is deemed to have lost independent existence.
The plan creates a welcome connection between income benefits and lump sum by offering critical illness cover as an option attached to the income protection element.
The unfortunate thing for some IFAs is that access to the Protection Menu is still restricted to certain intermediary firms. Consequently, those who fall outside this group will be unable to benefit from the many positives offered by the plan.
• ick Telfer, head of life and protection, Defaqto
