The Protection Menu offers the following protection options: - Level life cover - Level life with ...
The Protection Menu offers the following protection options:
- Level life cover
- Level life with accelerated critical illness (CI) cover
- Decreasing life cover
- Decreasing life with accelerated CI cover
- Family income cover
- Family income with accelerated CI cover
- Income protection (IP) with or without additional CI cover.
The plan also aims to top up income if:
- a child is diagnosed with a listed critical illness; or
- the life assured is unable to work or maintain a houseperson's role due to disability; or
- the life assured becomes unemployed; or
- the life assured takes time of work to care for a sick child resulting in lost earnings.
Product distributed through IFAs
The product is only available to a limited group of intermediaries.
Minimum and maximum age at entry
The minimum age attained at entry is 16 for all benefits. However, the minimum age for unemployment cover is 18. The maximum age at entry where life cover only is included is 79 attained. The maximum age where accelerated CI cover is included is 59 attained.
Maximum expiry age
85 where life cover only is included and 65 for accelerated CI cover
Maximum sum assured
£8,000,000 where life cover is included. Cover over £8,000,000 will be considered on an individual basis. The maximum sum assured for plans including CI cover is £1,000,000. This maximum includes any existing CI cover.
CI cover as a % of life cover
Where life assurance with CI cover is included, the CI cover acts as an accelerator of the life cover. However, a lower level of CI cover can be arranged within the same plan, which means that it can be anything up to 100% accelerated life cover.
Minimum premium
The minimum monthly premium is £7.50 and the minimum annual premium is £75.00 for each type of cover available within the plan, inclusive of the plan fee. Premium rates are guaranteed for the entire term. Reviewable premiums are not available.
Sum assured indexation in line with retail prices index (RPI)
If chosen, the benefit of the main cover will increase in line with the declared value of the RPI up to the maximum allowed under the plan. The benefit increase will never exceed 10%.
Indexation costing basis
Premiums will automatically increase on each plan anniversary. The amount of increase will depend upon the amount of the 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 and, where premium rates are banded, the amount of the original benefit.
Issue basis
The plan is available on a single life basis or a joint life basis. Within a plan, each cover can be taken out by one single planholder or two people as single or joint planholders. The plan can be written on a life of another basis. Joint life same sex contracts are available.
Monthly policy fee
There will only be one plan fee of £2.50 a month or £25.00 a year regardless of how many covers are included within a single or joint life plan.
Waiver of premium
Waiver of premium is available as an option. It is included free with IP cover.
Waiver deferred period
The deferred period can be 13 or 26 weeks. However, it does not need to be the same for both lives with waiver on a joint plan.
Waiver definition of disability
An 'own occupation' definition is used for occupation classes one and two. The company will pay a claim when the life assured is no longer able to perform the duties of their own occupation. An 'own or suited' definition is used for occupation class three. The company will pay a claim when the life assured is no longer able to perform the duties of their own occupation, or an occupation to which they are suited by means of experience and education. An 'activities of daily working' definition is used for occupation class four or for a houseperson.
Plan allows inclusion of IP benefit
IP cover is available within the menu and its inclusion is not dependent on any other benefits being included. The benefit can be set up on either a guaranteed premium rate or reviewable premium rate basis.
Option to include accident sickness and unemployment cover
Unemployment cover is available as an option for an extra cost with any main cover. It is provided by Pinnacle Insurance and premiums are reviewable at any time throughout the term of the cover. A review may result in premiums going up or down.
Life buy-back option
A life buy-back option can be added to life with CI cover for an extra premium. Providing that the life buy-back option was selected at outset, it entitles the life assured to take out a new life cover, without further underwriting, 12 months after payment of a CI or total permanent disability claim under level life with CI cover and decreasing life with CI cover. The maximum age for life buy-back is 59. The maximum sum assured for life buyback is £500,000.
Option to vary term
The term of the plan can increased or decreased subject to a maximum overall of 40 years and underwriting. An increase in term will be processed by a recalculation of the whole benefit premium based on the then current age, outstanding term and premium rates.
Option to vary sum assured
The sum assured may be increased subject to underwriting. The sum assured can be decreased at any time. For level cover, the premium will only be calculated for the increase in sum assured and will be processed as a new plan for the top-up. For decreasing cover, any increase will result in a recalculation of the entire benefit premium based on the then current age, outstanding term and premium rates. The change will be processed as a new plan for top-up.
Guaranteed insurability option (GIO)
If the life assured is under age 55, has been accepted on standard rates and was in good health when the cover was originally underwritten, Progress 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 increase in salary; marriage/civil partnership; childbirth/adoption; or purchase of a new property/increase in mortgage loan due to home improvements.
Maximum increase allowable is five times increase in basic salary (for career change), the amount of the loan (for mortgage event) or 50% of existing benefit to a maximum of £100,000.
Number of CI conditions as defined by the Association of British Insurers (ABI)
There are 23 ABI defined conditions covered:
Alzheimer's disease
Aorta graft surgery
Benign brain tumour
Blindness
Cancer
Coma
Coronary artery bypass surgery
Deafness
Heart attack
Heart valve replacement or repair
HIV infection
Kidney failure
Loss of speech
Loss of hands or feet
Major organ transplant
Motor neurone disease
Multiple sclerosis
Paralysis of limbs
Parkinson's disease
Stroke
Terminal illness
Third degree burns
Traumatic head injury
Number of other conditions covered
The plan covers 16 other CI conditions:
Aplastic anaemia
Bacterial meningitis
Cardiomyopathy
Creutzfeldt-Jakob disease
Emphysema
Encephalitis
Liver failure
Mastectomy
Open heart surgery
Pre-senile dementia
Prim pulmonary hypertension
Progressive supranuclear palsy
Pulmonary artery surgery
Rheumatoid arthritis
Severe lung disease
Systemic lupus erythematosus
Children's benefit
A lump sum benefit for the lesser of £25,000 or 50% of the current CI benefit will become payable if a natural or legally adopted child (between the ages of 30 days and 18 years) suffers from one of the 39 critical illnesses covered under the adult's plan, or becomes totally permanently disabled. The child must survive for 14 days after diagnosis for the benefit to become payable. There is a limit of £25,000 for each child within a single plan (for a maximum of two children). This feature is separate to the life assured's CI cover and is included free of charge.
Total and permanent disability
The plan will pay a single cash lump sum in the event of the life assured's permanent and irreversible inability before age 60 as a result of illness or injury.
Analyst's comment
In October Progress made significant changes to its Protection Menu. Nine extra critical illnesses were added: bacterial meningitis (previously only covered for children); cardiomyopathy; encephalitis; open heart surgery; primary pulmonary hypertension; progressive supranuclear palsy; pulmonary artery surgery; rheumatoid arthritis (chronic and severe); and systemic lupus erythematosus.
Also, the definitions of five existing conditions were improved. Aorta graft surgery now covers traumatic damage, benign brain tumour now covers the removal of a tumour without permanent symptoms, the 96 hour timeframe has been removed for coma, the requirement to have typical chest pains has been removed for heart attack, and third degree burns now covers 20% of the face. Additionally, children are now covered for all the defined critical illnesses and there are now no standard exclusions.
Detractors may dismiss these enhancements as part of the 'conditions creep' that has been a feature of the critical illness market and may question the real value of some of these additional conditions. However, for Progress these changes bring the product to the quality end of the market in terms of the cover offered and, combined with the seamless end-to-end new business process, supply a flexible and comprehensive protection solution.
Providing quality products and the tools to ease sales is key to helping IFAs sell more and the commitment to the market of specialist protection providers such as Progress should be commended. The next step is to extend the availability of this product to more IFAs.
Ben Heffer, Principal consultant, life and protection, Defaqto.
