FACTS AND FEATURES
SIDE BY SIDE.
It’s our aim to make selling income protection
as simple as possible. Here, we’ve compared the
features of our Income Protection Benefit Plan
with those of our Lifestyle Cover to help make it
easier for you to see how they can work together.
This is not a consumer advertisement. It is intended
for financial advisers and should not be relied upon by
private investors or any other person.
LIFESTYLE COVER
IPB
Premium frequency
Premium rates Deferred periods
Minimum benefit Maximum benefit
Monthly or annually.
Reviewed at 12 months if contract renewed.
30, 60, 90 or 180 days deferred period for accident or sickness.
30, 60 or 90 days deferred period for unemployment.
Subject to minimum premiums.
The lower of:
• 65% of the gross monthly income
• £3,000.
Monthly or annually.
Guaranteed.
4, 13, 26 or 52 weeks.
Subject to minimum premiums.
60% of first £30,000 gross annual earnings plus 50% of excess over £30,000.
For those self employed for less than 12 months the maximum benefit is 35% of pre-incapacity earnings. There is an overall maximum benefit of £200,000 per year (£16,667 per month).
Considered to be a houseperson; working less than 16 hours per week, are not in paid employment or are not working at the time of claim, the maximum benefit of £20,000 per year (£1,666.67 per month) applies.
Length of benefit payments
When are benefits paid?
Deductions at claim
Monthly benefit paid up to 12 months or until client returns to work (whichever happens first).
Benefits paid are dependent on which payment option your client has chosen.
Standard: the first payment of benefit is made 31 days after the deferred period ends. Any subsequent payments are made at 30 day intervals.
Back to Day One: the first payment of benefit is made at the end of the deferred period. Any payment is calculated back to the first day of the claim. Any subsequent payments are made at 30 day intervals.
Benefit is still paid if in receipt of (this applies to accident and sickness cover only) statutory sick pay.
If any claim arising under this policy is also covered or covered in part by any other Legal & General Lifestyle Cover policy, the total benefit paid can’t exceed 65% of your client’s gross monthly income or £5,000, whichever is lower irrespective of the number of policies you hold.
Monthly benefit paid until the client recovers and returns to work, the policy ends or the client dies, whichever occurs first.
If the Low Cost Option is chosen the monthly benefit will be payable for no more than a total of five years.
Benefit payments will start one month after the end of the deferred period and will then be paid monthly in arrears.
Deductions applied as follows if, when added to the monthly benefit payable, exceeds the maximum benefit limits or the income guarantee (whichever is greater):
• 60% of continuing gross income (such as sick pay)
• 60% of dividends if represent share in net trading profit
• 60% of gross income from investments if taken into account in determining earnings for the monthly benefit
• 60% of ill-health pension/early retirement schemes if payable for the same incapacity
• Any regular payments from any other insurance policies due to incapacity.
Employment related non-means-tested state benefits (such as contributory Employment and Support Allowance (ESA) and Statutory Sick Pay) are not deducted.
Claim notification As soon as possible and within 180 days of the date last in work.
Within two weeks of incapacity where four week deferred period is chosen, otherwise within four weeks for all other deferred periods.
Illness and injury exclusions 12 month pre existing condition.
Disabled due to normal pregnancy.
Self inflicted injury.
Alcohol or drug abuse.
Incurred during a criminal act.
War and civil commotion.
Disability due to operation or treatment not medically necessary including beauty treatment or cosmetic injury.
Additional exclusions apply for unemployment cover.
Full details of these exclusions are in the policy booklet, sections 4 and 5.
Alcohol and/or solvent or drug abuse.
Any exclusions as specified in the policy schedule.
Incapacity caused by normal pregnancy is not covered.
Waiver of Premium
Hospitalisation Benefit
Death benefits
Guaranteed Insurability Option
Not available.
Not available.
Not available.
Not available.
Premiums are waived when receiving benefit payment.
After seven consecutive nights in hospital, 1/30th of the monthly benefit (up to £150 per night whilst in hospital) will be paid for a maximum of 13 weeks.
An amount equal to the annual premium or 12 times the monthly premium being paid at the time of death.
Clients can increase their cover during the length of the policy without needing to answer any further medical questions if their circumstances change. For example:
• an increase in salary (due to a promotion or change of job)
• increase in mortgage amount
• on every third policy anniversary.
This feature is automatically included if accepted on normal rates before 45th birthday.
This option must be exercised before 50th birthday and within six months of each event. Can exercise option a maximum of three times.
The maximum amount the monthly benefit can be increased on each occasion is 50% of the original monthly benefit, subject to a maximum of £833.33 per month (£10,000 per annum).
AUTOMATIC FEATURES – AT NO EXTRA COST
Incapacity/disability definition
Physical or mental condition that prevents your client from carrying out their normal occupation (this applies to accident and sickness cover only).
Occupation classes 1, 2, 3 and 4: Own occupation.
Houseperson: Activities of Daily Living.
These are a list of daily activities
Legal & General use to determine your client’s level of incapacity. Please see our key features document for full details.
LIFESTYLE COVER
IPB
Proportionate benefit
Unemployment cover Linked claims
Not available.
This will pay a monthly benefit if the client becomes unemployed through no fault of their own for up to 12 months.
This will also pay a monthly benefit if:
• the client was to leave employment to become a full time carer for a member of their immediate family,
• if the client’s employer puts them on short-term working hours.
Automatically includes access to an unemployment assistance service – a job search service providing support and information, including CV production, a job database and skills manual.
If the client needs to claim again for the same disability within 90 days of returning to work, then we treat this as one claim; the deferred period won’t apply but the maximum 12-month benefit period applies to the total claim.
If they claim again relating to the same disability, at least 90 days after returning to work or for a claim relating to a different disability, then these will be treated as new claims, so the maximum 12-month period and deferred period will apply to this second claim.
If following a valid claim, the client returns to work on reduced earnings as a result of their incapacity, then a proportionate benefit is payable. This is reduced in proportion with the client’s new earnings.
Indexation
Stepped Benefit
Not available.
Not available.
Low Cost Option For a reduced premium, the maximum claims Not available.
period is limited to a combined total of five years, which does not need to be consecutive.
Not available if Stepped Benefit selected.
To keep the cover in line with increases in the Retail Prices Index (RPI), the client can increase the monthly benefit by the RPI (more than 1%, max 10%) on every policy anniversary. The premium will increase by the change in RPI multiplied by 1.5.
Two deferred periods and two monthly benefits are allowed within a single policy. This is useful for the client if they wish to integrate their benefits more closely with employer provided benefits.
Not available if Low Cost Option selected.
Not available.
If the client needs to claim again for the same or related cause within 12 months of returning to work, then the deferred period won’t apply.
OPTIONAL FEATURES – WHICH MAY INCUR AN ADDITIONAL COST
Continuous cover Available during statutory maternity, Not available.paternity or adoption leave, career break and periods of unemployment.
Available policy changes Can ask to change cover options if
circumstances change.
Can increase or decrease the length of the policy, reduce the monthly benefit, change the deferred period, or change the frequency of premium payments (annually to monthly or monthly to annually).
Underwriting may apply and eligibility rules apply.
TWO GOOD QUESTIONS TO GET YOU STARTED:
1. Do you always consider both short and long term protection cover in the
most cost effective way for your clients?
2. Does your chosen solution take into account any relevant deferred periods
and your clients existing policies?
LIFESTYLE COVER
What do theseproducts cover? Pays a monthly benefit to help protect your
client’s income whilst they are unable to work due to accident, sickness or involuntary unemployment for up to 12 months.
Pays a monthly benefit should the client be unable to work due to incapacity caused by an illness or an injury, resulting in a loss of earnings during the length of the policy.
Employment status This cover is available for contract,
self-employment, full time and part time workers provided they work at least 16 hours per week.
No occupations are excluded.
This cover is available for employed, self-employed and housepersons.
Entry age limits 18 to 59 years old. 18 to 64 years old.
Term of policy Minimum length of policy is five years (aged 45 Annually renewable.
or over).
No maximum except for years implied by minimum term and selected expiry date (see below).
Joint life cover No. Joint applicants are accepted.
Choice of cover Accident and sickness only.
Accident, sickness and unemployment only.
Unemployment only.
Incapacity caused by an illness or an injury only.
Underwriting Medically underwritten at point of claim,
not at application.
Medically underwritten at application.
Financially underwritten at point of claim.
IPB
Selected expiry date 12 months from start of policy (this is an
annually renewable contract).
Any ages between 50 to 70.
The plan should end no later than the client’s planned retirement date.
Product type Long-term income protection. Short-term income protection.
The following products are designed to pay a monthly benefit to help protect your client’s income if they were unable to work due to an illness, injury or unemployment.
The Income Protection Benefit Plan (IPB) helps to provide a monthly benefit if your client is unable to work due to incapacity caused by illness or injury leading to a loss of earnings during the length of the policy. If your client is classed as a houseperson (see Maximum Benefit on page 2), the benefit could help meet additional expenditure.
Lifestyle Cover provides a monthly benefit if your client is unable to work due to accident, sickness or involuntary unemployment. The benefit will be paid after a deferred period for up to 12 months or until they return to work, whichever happens first. So your client can concentrate on recovering or finding new employment without fear of changes to their lifestyle or losing their home.
The following table gives an overview of both products. Please refer to the Key Features Documents for more details of the policy benefits and limitations.
Legal & General Assurance Society Limited Registered in England and Wales No. 166055 Legal & General Insurance Limited Registered in England and Wales No. 423930 Legal & General Partnership Services Limited Registered in England and Wales No. 5045000
Registered office for all companies: One Coleman Street, London EC2R 5AA This is also where our head office is in the UK.
We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
W12792 02/15
