Group income protection

Transcription

1 Group income protection Reference PN23 PQ Policy conditions

2 Contents Page 1 Introduction 2 2 Basis of Contract 6 3 Law 6 4 Membership 6 5 Insured Benefit 7 6 Premiums 9 7 Residency 11 8 Continuation Option 11 9 Claims Rehabilitation benefit Linked Periods of Incapacity Further Information 15 1 Introduction 1.1 About your group income protection policy Friends Life is a business name of Friends Provident Life and Pensions Limited. Your policy is a legal contract between you and Friends Provident Life and Pensions Limited. Please read your policy conditions and policy schedule carefully. You should keep them in a safe place as you may need to refer to them if you claim under your policy. 1.2 What you, your, they, them, their, we, us and our mean. You and your The employer. They, them, and their The employee or scheme member as applicable. We, us and our Friends Provident Life and Pensions Limited. 1.3 Definitions Various expressions used in this document are in bold. The meanings for these are shown below. Actively at work This means an employee: has not received medical advice to refrain from work, and is not absent from work or restricted in working due to illness or injury, and is actively following their normal occupation. Their normal occupation must be at their normal capacity for the normal number of hours of their contract, at their normal place of business or at a location you need them to travel to. 2

3 Associated employer This is any other company or firm which is, or may become, directly or indirectly controlled by, or associated in business with you, that we have agreed in writing to include. Benefits in kind These are any ongoing benefits your employees receive as shown on HM Revenue & Customs form P11D. Ceasing Age An age at which the member will cease to be covered under the policy, as shown on the policy schedule. Continuing income Any income received or entitled to receive during a period of incapacity, including: any salary, commission, pension (unless the member was in receipt of the pension prior to joining the policy) or other income derived by the member from any employment or partnership including benefits in kind, and dividends. Where the income protection benefit paid by this policy is not taxable, for the purposes of calculating continuing income any sums falling within the paragraphs above which are received untaxed shall be increased by 50%. Where the income protection benefit paid by this policy is taxable, for the purposes of calculating continuing income any sums falling within the paragraphs above which are received as taxed income shall be reduced by one third. Payments made as holiday pay under The Working Time Regulations 1998 will not be classed as continuing income. Deferred period This is the first part of a period of incapacity for which no benefit is payable. Your policy schedule shows how long this period is. Separate periods of incapacity of not less than two weeks continuous absence, due to the same cause, will be linked together to make up the deferred period. This applies as long as the deferred period is achieved within a period of time which is no longer than twice the duration of the deferred period. For example, a 13 week deferred period would need to be achieved within 26 weeks. Dividends These are dividends received as remuneration from a private limited company in which the member and not more than three other shareholders are employed as full-time working directors. Employer You the policyholder or any associated employers that we have agreed to include in the policy and who are shown in the policy schedule. Employment Each and every remunerative occupation of the member at the beginning of a period of incapacity. Employment and Support Allowance The benefit payable due to limited capacity to work introduced in the Welfare Reform Act Reference in this policy to Employment and Support Allowance shall have the meaning attributed to it in that Act. Evidence of insurability Any information we require an employee or member to provide regarding their health, pastimes and lifestyle before we can confirm our acceptance of the sum insured applied for. Free cover level (FCL) The maximum amount of sum insured which members will be covered for without the need to provide evidence of insurability. HMRC Her Majesty s Revenue and Customs. 3

4 Income protection benefit The annual amount of benefit as determined by the formula shown in the policy schedule. Insured benefit The annual amount payable in respect of a member in the event of a claim. Limited payment term The maximum number of years that the insured benefit and/or the rehabilitation benefit will be paid for. Where applicable, your policy schedule shows you how long this will be. Main and substantial duties These are the essential duties of an occupation that take a significant part of a member s time and that neither you or the member can reasonably omit or adjust. Material facts The facts which are likely to influence us in the assessment of an application for insurance or in the assessment of a claim. The questions asked in connection with a quotation, on application forms and when seeking evidence of insurability cover the material facts relevant to the assessment of an application for cover. They include: the basis of benefits the participating employers the details of the people to be covered including their occupations, the locations where they work and aspects of their terms of employment previous insurance history evidence of insurability of specific individuals such as their duties, health, pastimes, lifestyle and earnings. The questions we ask in connection with a claim cover the material facts relevant to making a decision on the validity of that claim. They include: their duties and the steps which have been taken to adjust the work to cope with incapacity continuing income and pre-incapacity earnings. Member A person who meets the conditions for membership as set out in section 4. Paid occupation An occupation that is of financial value whether or not the member receives payment, profit or reward. Partner An equity partner who: is a part owner of the assets of that business, (as evidenced by a partnership deed or contract); and participates jointly and severally in the risks and rewards of the business; and is treated by HMRC as a self employed partner for tax purposes. Pension scheme A registered occupational or group personal pension scheme approved by, or registered with, the HMRC. Period of incapacity This is the period throughout which a member is incapacitated due to illness or injury. The definition applying to the policy is detailed on the policy schedule and will be either: Standard definition A period throughout which the member is totally unable to perform the main and substantial duties of their employment due to illness or injury, and is not engaged in any paid occupation. Amended definition A period throughout which the member is unable to perform any paid occupation whatsoever due to illness or injury. If the member is able to perform any occupation, there shall be no entitlement to benefit. details of the member confirmation of membership and entitlement to benefit the member s state of health, the nature and implications of their incapacity 4

5 Benchmark definition A period throughout which the member is unable, due to illness or injury, to perform the main and substantial duties of the benchmark occupation(s) offered by you and agreed by us at the outset of the policy or at a subsequent later date. During the benchmark period, the member must not be engaged in any paid occupation at all. Policy The legal contract detailed in your policy schedule and these policy conditions. Policy schedule The document that makes the policy conditions personal to you and sets out the cover we provide. Pre-incapacity earnings This is the earnings from the member s employment as follows: For earnings as an employee, this means the regular earned income immediately before the period of incapacity. In addition dividends, as defined in page 3, received by the member in the 52 weeks immediately before the period of incapacity and which represent the member s share in the net trading profit of that company from its normal, regular business during those 52 weeks. For earnings as a partner, this means the average of the member s share of pre-tax profit from their trade, profession or vocation over the three years, or such shorter period as agreed with us, immediately before the period of incapacity for the purpose of Schedule D Case I and II of the Income and Corporation Taxes Act 1988, (i.e. their share of pre-tax profit after deduction of trading expenses) as assessed for Income Tax and agreed by HMRC. Income from drawings, savings and investment, except for dividends as described in page 3, are not included as pre-incapacity earnings for either employees or partners. Premium rates The age related premium rates we use to calculate the premiums under the policy in accordance with section 6.1. Rate guarantee expiry date The date specified in the policy schedule on which the premium rates or the unit rate used to calculate the premium ceases to be effective, or any other date notified to you as a rate guarantee expiry date. Regular earned income The normal (regular and sustainable) pre-tax earnings for PAYE assessment purposes of the type to be shown on HMRC form P60 and benefits in kind. Irregular amounts such as bonuses, commission, overtime and incentive payments will only be included in regular earned income if they have been included in scheme salary. If they represent more than 20% of scheme salary, or change by more than 10% a year, they will be averaged over a three year period. Review date The date shown in the policy schedule, and the date each year when the policy accounting is reviewed and changed to take account of changes in membership and earnings. Scheme salary The agreed definition of scheme salary that will be used to calculate the income protection benefit in respect of a member and is defined in the policy schedule. Scheme year The period commencing on the start date and ending on the day before the annual review date. From then on, any period commencing on an annual review date and ending on the day before the next annual review date, or any other period agreed between us. Sum insured The total amount of income protection benefit, National Insurance contributions and pension contributions that are shown on the policy schedule. Unit rate The rate of premium advised to you as policyholder, as the unit rate, and is expressed as a percentage of total scheme salary or total sum insured as appropriate. 5

6 2 Basis of contract 2.1 The contract between you and us is made up of all the following: the policy, any documents attached to the policy when we issue it, and any endorsements or amendments to the policy. It is reliant on: the application, all material facts disclosed to us and our agents in the course of quotation, application for insurance, submission of a claim and during the routine administration of the policy being accurate and complete, and where it relates to the insurance of a particular member, any statements made or information given by the member or you, to us or to a medical officer appointed or acting for us, being accurate and complete. 2.2 We can change the policy conditions in respect of our group income protection policy. If we do this we will do so from a rate guarantee expiry date and will explain why we are making the change. 2.3 Our rights to cancel the policy We can cancel the policy if you provide any false material facts or fail to give us accurate and complete material facts. In this event the policy will immediately become invalid from the start date and we will not pay any benefit at all. 2.4 Your rights to cancel the policy You can cancel the policy at any time, by giving us at least 14 days notice in writing. When we receive your notice we will tell you about anything you need to do. All cover will immediately end when you cancel the policy. However, we will continue paying any claims we are already paying benefit for and will consider any claims for incapacity that started before the policy was cancelled. Cancellation of a policy cannot be backdated. 2.5 Parties to the contract This contract is between you and us. Nothing in this policy gives anyone else any direct or indirect rights, including the members, except where you have made a claim for insured benefit and we refuse to pay, or stop paying, that insured benefit. In that case, the member has the right to take action against us to make a claim if they are still employed by you and you decide not to continue with the claim. 2.6 Transfer of your policy rights It is not possible to assign the policy. It is also not possible to transfer any benefits or rights under the policy without our prior written approval. We will then issue the required policy endorsement. 3 Law 3.1 The law of England governs the policy, and the Courts of England shall have exclusive jurisdiction in respect of any dispute. 4 Membership 4.1 Conditions for membership An employee or partner will become a member of the policy, or may increase their benefit under this policy, if they meet the eligibility rules set out in the policy schedule and the relevant actively at work requirements (see 4.2 below). Our liability for a member will end if the member stops meeting the eligibility rules set out in the policy schedule. We may agree to let employees or partners become members of the policy in other circumstances. If we agree to consider including them, we may ask them to complete a Statement of Health and Insurability form or any other evidence we think is appropriate. No cover will be provided until we have given you confirmation in writing. 4.2 Actively at work requirements For all new policies, anyone joining the policy must be actively at work on the last working day before their cover starts under the policy. 6

7 4.3 Our requirements for anyone not meeting our actively at work requirements are: Basis A For new policies with less than 20 potential members, anyone not actively at work on the last working day before cover starts under the policy must either supply us with the evidence of insurability we ask for before cover can be considered, or be actively at work for five consecutive working days before their cover starts under the policy Basis B For new policies with 20 or more potential members cover will start for those not actively at work on the last working day before cover starts under this policy, when they are next actively at work. 4.4 Policies switching from another insurer For all policies switching directly from another insurer, members must be actively at work on the last working day before cover starts under this policy. For anyone who is not actively at work on the last working day before the cover starts under the policy, their cover will start on the day they are next actively at work. 4.5 Potential members joining an existing Friends Life policy As potential members become eligible to join an existing Friends Life policy, they must be actively at work on the working day that they are eligible to join For potential members not actively at work on the working day that they are eligible to join, their cover will start under the policy on the day they are next actively at work. 4.6 Increases in sum insured For increases in the sum insured where we do not need evidence of insurability, the member must be actively at work on the working day before the increase in cover comes into force For members not actively at work on the working day before the increase comes into force, the increase in cover will start on the working day they are next actively at work. 4.7 Pre-arranged absence We will consider those who are on a pre-arranged absence (for example statutory leave, maternity or paternity leave or holiday etc) to be actively at work, providing they fulfil all other conditions for membership. This will not apply if their medical records show that on the day cover starts or the day increases apply under the policy, they had a medical condition which would have prevented them from working. 4.8 Free cover level For any sum insured below the free cover level, we will not require detailed evidence of insurability, for members if: everyone who fulfils the eligibility rules, detailed in the policy schedule, is included in: the policy when they first satisfy those rules, and any membership data we ask for. the full sum insured to which they are entitled is maintained at all times, and they have met the actively at work requirements We can change the amount or conditions relating to the free cover level at any time by giving you written notice. If we withdraw the free cover level or reduce it, this will not affect any sum insured already provided If the free cover level is increased, we will not automatically increase the free cover level for members who have submitted evidence of insurability or have had their cover restricted to a lower free cover level. 5 Insured benefit 5.1 Entitlement to insured benefit Entitlement to insured benefit, limited where appropriate by section 5.2, will start at the end of the deferred period and will continue until whichever happens first: the member s death, or the end of the member s period of incapacity, or the member receives a level of continuing income that means no benefit is payable in accordance with section 5.2, or 7

8 the member reaches the ceasing age shown in the policy schedule, or the benefit period ends under a limited payment term, or the member is no longer employed by you. If the insured benefit and/or rehabilitation benefit has been paid for a period(s) that together total the duration of the limited payment term, no further benefit will be payable in respect of that member should they suffer from the same or any directly or indirectly related illness or injury. 5.2 Limitation of insured benefit payable At the end of the deferred period, the maximum insured benefit we will pay is the lowest of: Income protection benefit An annual amount that is not above the lowest of: 300,000, or if the income protection benefit is taxable, an amount that, when added to the member s continuing income, is not more than 75% of pre incapacity earnings minus the basic Employment and Support Allowance including the work related activity component, or if the income protection benefit is not taxable, an amount that, when added to the member s continuing income, is not more than 50% of preincapacity earnings. During the course of a claim, we will revise the income protection benefit whenever the member s continuing income changes. Pension scheme contributions benefit An annual amount that is not above the lowest of: 35% of pre-incapacity earnings, or 50,000, or the normal regular contribution the employer and member were paying immediately before the period of incapacity. The above cannot include member contributions of more than 5% of their scheme salary. National Insurance contributions benefit The amount of National Insurance contributions will be the actual amount of National Insurance contributions you are required to pay in respect of the member you are claiming for and are as detailed in the policy schedule. If during a period of incapacity, contribution levels are changed by the State, the amount we pay will not be increased but may be reduced in line with any of the changes. If this happens and the amount of insured benefit is less than the sum insured, we will not refund any premiums Increasing insured benefit payable during the course of a claim (escalation) If escalation has been selected, the rate of increase in the insured benefit during a claim will be shown in the policy schedule. Any increases will be made on the anniversary of the date that payment of benefits commenced subject to any change in the member s continuing income. When we stop paying benefit, the insured benefit will go back to the level shown in the policy schedule. 5.3 Evidence of insurability When: an employee with a sum insured above the free cover level becomes eligible to join the policy, or a member s salary results in an increase in the sum insured above the free cover level or a previous limit set by us, or you request cover for an individual who does not meet the conditions of membership, cover will be subject to them providing evidence of insurability and acceptance by us. We can also insist that they are examined by a medical officer appointed by us and we can get any other evidence we think is appropriate before confirming whether the cover can be provided. When we receive the evidence of insurability we may accept the application on our standard terms or: charge an extra premium, and/or set special conditions on the insurance (or any part of it), or turn down the application. We will confirm our decision to you in writing. 8

9 If, when providing any evidence of insurability, a member: makes an untrue statement about a material fact, or deliberately omits to tell us a material fact, or provides false or falsified evidence of a material fact, then we will restrict any cover for that member to the free cover level under the policy or a previous limit set by us. Where a policy switches to us from another insurer, and a member s benefits in that previous insurer s policy are above the free cover level available from us, we must have full details of previous benefits (including any non-standard terms or restrictions of cover) when we prepare our quotation. Unless we said otherwise in our quotation, we will accept the previous insurer s terms, up to the level of benefit with that previous insurer at the time of the switch, subject to details being provided to us within 30 days of the start date of the policy. 5.4 Temporary cover We will provide temporary cover equal to any sum insured being applied for in excess of the free cover level or in excess of a sum insured previously accepted by us, while that benefit is being assessed. Temporary cover will start from the effective date of the member being entitled to the cover under the policy provided we are notified within 30 days of the effective date of the member s entitlement. Temporary cover will continue for 90 days or until underwriting is complete if earlier Temporary cover will not apply in the following circumstances: to anyone who does not meet the conditions for membership, or if a member has refused to provide evidence of insurability or any other requirements either now or in the past, or to any member who previously had cover refused, restricted or special terms (an increase in premium, an exclusion or other non-standard restriction in cover) applied either now or in the past, or for members being underwritten for cover beyond their ceasing age, or for switched scheme members who have previously been restricted to an amount imposed by a previous insurer, and who are undergoing underwriting with us for unrestricted benefit, or if any incapacity arises directly or indirectly from any medical condition the member has consulted a doctor about in the five years before becoming entitled to cover under the policy or to an increase in cover. 6 Premiums All premiums are payable in Sterling in the United Kingdom. The payment or acceptance of payments by us at any other place will not be deemed to have waived the application of this condition to any subsequent payments. 6.1 Amount of premium single premium We will use the premium rates in force at the start of each scheme year to calculate the premiums for all benefits under the policy until the rate guarantee expiry date shown in the policy schedule. From the rate guarantee expiry date, we can introduce new premium rates and we will set a new rate guarantee expiry date. Any adjustment to the premium for new members who join the policy or existing members leaving the policy, will be made at the next review date. 6.2 Amount of premium unit rate For policies that only allow new members to join and increases to the existing members sums insured to take place at the review date, premiums will be based on the scheme salary for all members at the review date. We will not average the scheme salary over the scheme year. For policies that do allow for new members and increases in sums insured during the scheme year, we will work out the premiums as follows: For policies with a flat rate benefit, we will use the unit rate in force at the start of the scheme year and apply it to the average of the total amount of benefit for the members insured under the policy at the start of the scheme year and the day before the beginning of the next scheme year. 9

10 6.2.2 For policies which are not flat rate, we will use the unit rate in force at the start of the scheme year and apply it to the average of the scheme salary for all members insured under the policy at the start of the scheme and the day before the beginning of the next scheme year. If we are unable to work out the total scheme salary for any scheme year, we may calculate an approximate premium based on the information we have available. If the approximate premium in respect of any scheme year period proves to have been: too large, we will refund any excess to you, or too small, we will notify you of the additional amount and the requirements for payment of the balance. 6.3 Premium Guarantee Both the premium rates used to calculate single premiums and the unit rate are guaranteed until the rate guarantee expiry date shown in the policy schedule. However, they may be changed if there is a change to the material facts the cover is based on such as: changes to State benefits, changes to tax laws, changes to the rates of National Insurance contributions, other than adjustments being made to keep pace with changes in the RPI or its equivalent, changes to the law, legislation or regulations that affect Group Income Protection policies, changes to the contractual basis of the policy, or changes to the number of members or total sum insured by 25% or more from that on the date the unit rate or premium rate was last set. 6.4 Providing information Within one month of any review date you must give us any information we ask for so that we can calculate the premium. If you do not provide the information, we can end the cover under this policy or change the premium based on assumptions we will make relating to the material facts and scheme salaries the cover is based on You must tell us in writing as soon as there is any change to the material facts the cover is based on. If we agree to continue the cover, we will write to you to tell you what we have agreed. If the terms are different to those previously offered we will need your agreement and acceptance of the revised terms in writing. 6.5 Paying premiums You are responsible for paying all premiums under this policy within 30 days of it being due. If you pay annual premiums you must pay them on the date the cover starts and then on each review date. If you pay monthly premiums, you must pay them each month, starting on the day cover starts For annual premiums, on any review date you must pay the annual premium in force at the time. You may then have to pay an extra amount, or you may receive a refund, when we have processed the information we have asked for. For monthly premiums, you will continue to pay the same monthly payments until we tell you the new amount For single premium policies, you do not have to pay premiums for a particular member on or after the review date immediately before that member s ceasing age if a ceasing age is specified in the policy schedule. 6.6 Proof of age The premiums we set for a member will be based on the information provided to us. If evidence shows that the age given for an individual member is incorrect, the sum insured or the premiums for the member will be adjusted by an amount we calculate to be correct based upon the member s correct age. If the member were not eligible to be covered under the policy, we will cancel their cover and adjust the premium rate at the end of the scheme year. 6.7 Premiums when claims are being paid If we are paying benefit for a member, you do not have to pay premiums for that member from the first review date after the date we accepted the claim and started paying benefit. You will then start paying premiums for that member again on the first review date after the date benefit ends. 10

11 6.8 If you do not pay your premiums If you do not pay any premium within 30 days of it being due, the policy will immediately end. We do not have to give you notice and will not consider any claims under the policy other than for any member whose period of incapacity had started before the date the premium was due. During the six months after the date a premium is not paid, we may start cover again if you provide acceptable evidence of the members health and of any other factors affecting the risk. We will tell you on what terms and conditions we are prepared to allow the cover to be restarted, and this must include the payment of all outstanding premiums. 7 Residency 7.1 Members may travel or be employed anywhere in the world but entitlement to benefit is: restricted to a maximum of 26 weeks in any 52 week period, and subject to an overall maximum of 52 weeks, while they are travelling or living outside Great Britain, Northern Ireland, the Channel Islands and the Isle of Man If the member returns to Great Britain, Northern Ireland, the Channel Islands or the Isle of Man, benefit would continue to be paid as normal. 7.2 We are willing to consider providing cover for employees working in wider geographical areas and for longer periods abroad, as long as a large majority of your employees are living and working in Great Britain, Northern Ireland, the Channel Islands or the Isle of Man. This is as long as: the employees working outside these areas continue to meet the policy s eligibility rules, and the employees working outside these areas have a contract of employment with a UK registered company that is covered by the policy, and are paid through the UK payroll, and we can get satisfactory medical and claims evidence (a reasonable amount may be taken off the benefit to cover the costs of translating evidence into English if this is necessary), and in the event of incapacity, you will look into all opportunities and measures, making reasonable adjustments to the workplace, work conditions and duties, to help the member return to work, as we would expect from an employer in the United Kingdom. 7.3 To get this wider cover, you must tell us the nationalities of these employees and the countries they work in. You must do this when you apply for the policy and at each review date. We will not provide any cover until we have told you about any special terms that may apply. 8 Continuation option 8.1 This option only applies if it is shown in the policy schedule. It is not available to employees on fixed term contracts, members covered for limited payment term benefits, or if you stop paying premiums. The amount, type and terms of the cover available will be the normal terms and conditions available under our individual income protection policies at the time of application. 8.2 The continuation option provides income protection benefit only and is only available to a member who: stops being employed by you, and is not in a period of incapacity, and is not within ten years of their ceasing age shown in the policy schedule, and is not over 55 years of age. 8.3 For this option, the member must complete the relevant application form and return it to us within 30 days of stopping working for you. We will issue the new policy without the member having to provide evidence of their health. The exercise of this option is subject to the following special conditions: The amount of income protection benefit will be up to a maximum of the amount provided under this policy at the date the member stops working for you. However, this may be further reduced to any maximum available under our individual income protection policies at the time. 11

12 We will set the premium at the time this option is taken out. The new policy will include any special terms and conditions included under this policy. All terms and conditions will be available from us. The member must still be in a full time paid occupation that is acceptable to us and must be regularly working 16 hours or more a week The deferred period cannot be shorter than that applying to the income protection benefit under this policy. The amount of any escalation provided under the new policy will not be greater than any escalation provided under this policy. 9 Claims A claim for benefit is subject to the conditions set out below. All claim payments made by us will be in Sterling in the United Kingdom. If you need to make a claim, please telephone our claims team on A member s period of incapacity will only be considered if: you have looked into and carried out any reasonable adjustments to the working conditions, the physical features and any other arrangements relating to the member s occupation which would enable them to continue working for you, and you have looked into and, where appropriate, made reasonable efforts to carry out any rehabilitation, and reintegration programmes designed to help the member continue working for you. the member has made reasonable efforts to take part in any rehabilitation or reintegration programmes to help them continue working If in connection with a claim for any benefit you: make an untrue statement about a material fact, or deliberately omit to disclose a material fact, or provide false or falsified evidence of a material fact, then we will reject any pending claim and cancel your policy If in connection with a claim for any benefit any member: makes an untrue statement about a material fact, or deliberately omits to tell us a material fact, or provides false or falsified evidence of a material fact, then we will reject any claim for that member and remove any cover provided for them under the policy. We can take any steps necessary to recover any benefit we have paid to you as a result of any false or missing information Members must make all reasonable efforts in order to receive the Employment and Support Allowance they are entitled to If you think that a period of incapacity is likely to last beyond the end of the deferred period, you must tell us as soon as possible and at least eight weeks before the end of the deferred period. We must receive both your completed claim form and the member questionnaire within 4 weeks There shall be no entitlement to benefit in respect of any period prior to the date we receive the completed forms. However, we may agree otherwise if we are satisfied that the incapacity prevented the claim from being made earlier We will not pay any benefit until after the end of the deferred period We will pay benefit monthly in arrears. For incomplete months we will pay the appropriate proportion of the benefit We will normally pay benefit to you. However, if you are a partnership you must nominate a person to receive any payment we make on behalf of the partner/member you are claiming for We will only pay the benefit if, and when, we are satisfied that the claim is valid. For us to pay benefit you and the member must provide any evidence to support your claim when we ask for it. Payment of your claim is dependent on this evidence being produced. The evidence will vary depending upon the circumstances of the claim and may include but is not limited to: evidence through examination by a medical examiner we name that the member continues to be incapacitated, any other medical tests or investigations our Chief Medical Officer considers appropriate, 12

13 evidence the member is attending an appropriate medical practitioner and is receiving medical treatment in accordance with National Health Service Best Practice for example guidance issued by the National Institute for Health and Clinical Excellence and The Occupational Health Clinical Effectiveness Unit, the member s medical records, evidence of employment and the duties of the member s employment, evidence of pre-incapacity earnings and continuing income, evidence of your, and where appropriate, the member s contributions to the member s pension scheme, evidence of the member s age You must tell us in writing immediately if: the member s doctor stops issuing them with medical certificates stating that they are unable to work, State benefits, credits or allowances being paid to the member because of incapacity are stopped or reduced for any reason, the member returns to paid or unpaid work or engages in rehabilitation or attends a work training programme, or the member is travelling or residing abroad, outside their normal place of residence, during your claim. Pregnancy is not an illness. We will therefore not consider any claim that arises solely from the normal effects of pregnancy. If you do not tell us if one or more of these events happen we may reject any claim for that member and can take any necessary action to recover any benefit we have paid to you as a result of any false or misleading information. 9.2 If a member s employment ends If, during a period of incapacity, the member s employment ends, for reasons other than gross misconduct, on request, we will pay income protection benefit only direct to a member if: you have evaluated and made all the necessary reasonable adjustments required by the Disability Discrimination Act, and we have agreed that the claim remains valid in all aspects other than the member leaving service You should consult us before taking any action as you, the member and us need to agree in writing for the benefit to be paid direct When we pay income protection benefit direct to a member our standard definition of incapacity will be changed to: A period throughout which the member is totally unable to perform the main and substantial duties of their employment or any other occupation for which they are suited by way of training, education and experience due to illness or injury, and is not engaged in any paid occupation The definition of incapacity will not change for those members insured on our amended or benchmark definitions When a member s employment ends, we will stop making payments from this policy for pension or National Insurance contributions Payments to the member will end when their entitlement to benefit ends If a member who cannot work because of incapacity is a partner in your firm, we will pay income protection benefit direct to that member with no change in their definition of incapacity if: the partnership agreement states that the member must leave the partnership in the event of significant long term incapacity, and we agree the claim is valid in all aspects other than the member leaving your service. 9.3 If you cancel the policy If you cancel this policy after we have told you in writing that we have accepted a claim, we will continue to pay benefit to you for that member until entitlement to benefit ends in line with section 5.1. We will only consider new claims if the period of incapacity started before the policy was cancelled. we have been making income protection benefit payments to you, in respect of that member, for the whole of the previous two years, and 13

14 9.4 If your business stops trading If, during a period of incapacity, your business stops trading, after we have told you in writing that we have accepted a claim, we will arrange to pay the income protection benefit only, direct to the member For those members insured on our standard definition of incapacity, the definition of incapacity will change to: A period throughout which the member is totally unable, due to illness or injury, to perform the main and substantial duties of their employment or any other occupation for which they are suited by way of training, education or experience, and is not engaged in any paid occupation The definition of incapacity will not change for those members insured on our amended or benchmark definitions Any payments for pension scheme contributions or National Insurance contributions will stop We will only consider new claims if the period of incapacity started before you stopped trading Once the claim is no longer valid, cover for that member under the policy will cease and we will not make any further payments for any future period of incapacity for that member. 10 Rehabilitation benefit 10.1 Entitlement to rehabilitation benefit arises if the conditions for entitlement to insured benefit are met except that the member s continuing partial incapacity resulting from illness or injury, means the member: is continuously restricted in the scope of their occupational activities, and continues to earn less than their pre-incapacity earnings, and continues to need regular supervision and treatment from a registered medical professional We calculate the amount of rehabilitation benefit we will pay using the following formula. pre-incapacity earnings less new earnings pre-incapacity earnings x income protection benefit* = rehabilitation benefit *We use the amount of income protection benefit (as detailed in section 5.2) that you would be entitled to if you were eligible to claim income protection benefit for a member disregarding their new earnings. We will also reduce the amount of continuing income, used in our calculations, to take account of any State benefits, credits or allowances that a member will lose by continuing to work in a reduced capacity Example of how we calculate the rehabilitation benefit we pay: Monthly amount of IP benefit entitled to receive: = 1200 Monthly pre-incapacity earnings = 2080 Reduced monthly earnings = x 1200 = The monthly amount of rehabilitation benefit we will pay is therefore If as a result of Condition we cannot pay benefit for 52 weeks, your claim will end. There will be no further entitlement to benefit without having suffered a new period of incapacity You will not be entitled to rehabilitation benefit at the same time as any other benefit under this policy If the insured benefit and/or rehabilitation benefit has been paid for a period(s) that together total the duration of the limited payment term, no further benefit will be payable in respect of that member should they suffer from the same or any directly or indirectly related illness or injury. 11 Linked periods of incapacity 11.1 We will link together any period of incapacity for a member if it starts within 52 weeks of the end of a previous period during which income protection benefit was payable or during a period of entitlement to rehabilitation benefit and all such periods that arise from the same or any related illness or injury Where the requirements of Condition 11.1 are met, the claim arising from the linked period of incapacity will be assessed in accordance with the appropriate conditions for the benefit being claimed with the exception that: 14

15 we will take the regular earned income since the member s return to full time work and will make up the shortfall of 52 weeks earnings by taking the proportion of the pre-incapacity earnings figure used in the previous claim, and the deferred period will not apply There will be no entitlement to a linked claim if you cancel this policy. Unless: upon cancellation you simultaneously take out cover with a new insurer on an identical basis to this policy, and you have been receiving benefit for a member who returns to full time work and meets the actively at work conditions of the new insurer. If a claim then arises from the same cause within 52 weeks of the end of a previous period of incapacity, we will pay a benefit for that member up to the end of the new insurer s deferred period but under the terms of this policy The maximum duration of any periods of incapacity in a linked claim, arising from the same or any directly or indirectly related illness or injury will not be longer than any limited payment term shown on your policy schedule. 12 Further information The insurer The cover under this group income protection policy is provided by us, the insurer. Our address is: Friends Life Pixham End Dorking Surrey RH4 1QA Registered in England, registration number If you need to make a claim, please telephone our claims team on Questions and complaints We want you to be entirely satisfied with your group income protection policy. If you do have any questions or complaints, you should first contact the adviser who arranged this policy for you. If there was no adviser, or the matter is not settled, please contact: The Complaints Manager Friends Life Pixham End Dorking Surrey RH4 1QA Telephone: If you are still unhappy, you can contact the Financial Ombudsman Service at the address below. Contacting them does not affect your right to take legal action against us. Financial Ombudsman Service South Quay Plaza II 183 Marsh Wall London E14 9SR Telephone: or The ombudsman can normally deal with complaints from small businesses with less than 10 employees and a turnover of up to 2m a year (or, if they are part of a group of companies and the group s turnover is less than 2m). If your business is too large to refer your complaint to the ombudsman you can give a member the right to refer the complaint to the ombudsman. If the complaint relates to a claim, a member can complain to the ombudsman if: you have made the claim, and the member is still employed by you. Disputes between you and the members relating to their employment terms, including rights under disability discrimination laws and rights to occupational sick pay (which may be financed by a group policy bought by you), would usually be settled by an employment tribunal. 15

16 Friends Life is a business name of Friends Provident Life and Pensions Limited Friends Provident Life and Pensions Limited Registered Office: Pixham End, Dorking, Surrey RH4 1QA Incorporated company limited by shares and registered in England number Telephone PQ