Optional Extras

for Critical Illness Cover

There are quite a few options that you may wish to consider, brief details are provided here but for full information you should always get a quote from us and read through the supporting information before deciding. The more common options are detailed below:

• Guaranteed/Reviewable Premiums
• Waiver of Premium (WOP)
• Indexation
• Guaranteed Insurability
• Separation Option
• Reinstatement Option
• Trusts
• Life Cover Buyback
• Total Permanent Disability (TPD)
• Own Occupation
• Suited Occupation
• Any Occupation
• Activities of Daily Working (ADW)
• Activities of Daily Living (ADL)
• Functional Assessment Tests (FAT's)

Guaranteed/Reviewable Premiums

Almost all insurers offer guaranteed premiums with their life insurance policies. This means that the premiums are guaranteed not to change during the term of your policy. Some insurers also offer reviewable premiums. Reviewable premiums can look cheaper initially but remember that premiums are reviewed periodically and may well increase making it more expensive in the long run. Top of Page.

Waiver of Premium (WOP)

This is included at no extra cost in all of our term assurance plans, but it should not be confused with the more comprehensive Critical illness cover. Terminal Illness typically allows the cover to be paid out early if you are diagnosed as having less than 12 months to live. The exact wording can vary slightly between life assurance companies, more information can be found in the policy details once you get a quote. Top of Page.

Waiver of Premium (WOP)

If you cannot work as a result of an accident or injury the monthly premium is waived by the insurance company until such time as you are fit and able to return to work. This can help make sure that your valuable life insurance cover is maintained even if your income has reduced or even stopped altogether. You will pay a small extra monthly premium to include Waiver of Premium cover. Top of Page.

Indexation

This can be added to any Level term Assurance or Family Income benefit policy. Essentially the amount of cover you have will increase every year by either a small fixed percentage or by one of the inflation indexes (RPI, NAEI etc). This is designed to ensure that the value of your life insurance cover is maintained in the face of inflation. Your premium will also rise every year by the same percentage as your cover. Top of Page.

Guaranteed Insurability

This is included in most term life insurance plans at no extra cost. Typically this option will allow you to increase the cover provided in your term assurance plan without any underwriting in the event that you move home, get married or have a child. This can be useful if you have suffered any deterioration in your health since you first took out your plan as the insurance company has to give you the extra cover on the same terms as your original plan, regardless of your state of health. Please check your quote and supporting information for full details. Top of Page.

Separation Option

This applies to joint life policies where two people are covered under one plan. If the couple were to separate then this option would allow them to set up new individual plans in their own names to the same level of cover as previously provided without any medical underwriting. This can be a convenient way to guarantee your cover even if you were to suffer deterioration in your health. Top of Page.

Reinstatement Option

This applies to joint life policies where two people are covered under one plan. If one party were to die then normally there would be a pay out and the policy lapses, leaving the survivor with no life insurance cover. This option allows the survivor to reinstate their lost cover without the need for any medical underwriting. This can be a useful way to guarantee your cover even if you were to suffer deterioration in your health. Top of Page.

Trusts

A Trust is a form of legal documentation that should be considered whenever taking out a life insurance policy. They are quite simple to set up and we can provide all the documentation you will need. Trusts are used to avoid paying Inheritance Tax on the proceeds of a UK life assurance payout and to speed up payment of the proceeds by avoiding Probate. Top of Page.

Life Cover Buyback

When you have an accelerated Critical illness plan and make a valid claim under the critical illness cover, the life cover is usually lost and as you have made a CI claim then you are probably uninsurable. Including Life Buyback allows you to arrange a replacement life insurance policy with the same insurer with no new underwriting. This option is not available from all insurers and the new life policy will have some restrictions. Top of Page.

Total & Permanent Disability (TPD)

Total & Permanent Disability (TPD) is one of the illness definitions under a critical illness plan. It is sometimes described as a 'catch-all' clause covering 'anything else that happens to you that prevents you from working'...however this isn't the case. The important thing to remember is that the condition has to totally and permanently prevent you from being able to work for the rest of your life; this means that there is no prospect of recovery...ever.

Temporary disability is not covered by critical illness plans. If you wish to cover yourself against temporary disability see our Sickness and Unemployment section.

TPD accounts for less than 5% of claims but causes the most misunderstanding amongst consumers so we feel it is important you understand how this clause works.

There are a number of definitions of disability, some insurers give you the choice, and others will just give you the best definition possible based on your occupation when you apply. Whichever definition you have, remember that the symptoms must be permanent. The definitions follow below:

Own Occupation

This is the best definition to have. It means that the policy will pay out if, following illness or accident, you are totally unable to follow your own occupation and not working in any other job. This means that if you were an accountant but can no longer be an accountant it would pay out. Top of Page.

Suited Occupation

The policy will pay out if, following illness or accident, you are unable to perform any occupation suited to you by training, education or experience. This means if an accountant had previous experience as a telesales operative and could still do this job the policy won't pay out. Top of Page.

Any Occupation

The policy will pay out if, following illness or accident, you are unable to perform any occupation at all. This means the policy will only pay out if the accountant can't do any kind of paid work. Top of Page.

Activities of Daily Working (ADW)

This is similar to the Any Occupation definition but takes a more objective view. Usually around 8 tasks are set including, ability to use a pen/keyboard, climb a flight of stairs, use the telephone etc. The policy will pay out if you cannot complete around half of them. Top of Page.

Activities of Daily Living (ADL)

These are similar to the ADW's (above) but the tasks are defined for people who aren't in paid employment when they claim. There are usually around 6 tasks involving the ability to feed oneself, walk across a room, wash, use the toilet etc. The policy will pay out if you are unable to complete around half of them. Top of Page.

Functional Assessment Tests (FAT's)

Rather than using ADL's and ADW's some insurers have condensed the two sets of tests to come up with Functional Assessment Tests or FAT's. There are usually around 6 tests with the claimant having to fail at least 3 of them to receive a payout. Top of Page.

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