KEY FEATURES OF THE ST. JAMES S PLACE INCOME REPLACEMENT PLAN

Transcription

1 KEY FEATURES OF THE ST. JAMES S PLACE INCOME REPLACEMENT PLAN

2 CONTENTS PAGE Its aims 1 Your commitment 1 Risk factors 1 Questions and answers What is the St. James s Place Income Replacement Plan? 2 How do I decide what features to choose to meet my needs? 2 The amount of benefit that can be paid 2 The earnings upon which to base your cover 2 Housewives and househusbands cover 3 Increasing your cover 3 Increasing your benefit payments 3 When benefit payments start 3 How long will the benefits be paid for? 3 How long should cover last? 3 Medical and other details we may need 3 How flexible is the plan? Regular review of your cover 4 Changing occupation 4 Becoming unemployed 4 Going on maternity leave 4 When will the plan pay out? When to claim 5 When to inform us of your incapacity 5 The extent of incapacity 5 How we will assess your claim 5 How long the benefit is paid 5 Claiming again after returning to work 5 Returning to work part time or to a less well paid position 5 How and when benefits are paid 6 Contribution payments when claiming 6 Other income which may reduce your benefit 6 When will the plan not pay out? 6 Benefit payments when you are not in the UK 7 What will the contribution be? 7 How are my contributions reviewed? 7 What happens if I die? 8 What are the charges? 8 What if I stop paying my contributions? 8 Does the plan have a cash in value? 8 Is my benefit taxable? 8 Can I change my mind? 8 The St. James s Place Partnership 8 Our Guarantee 8 Further information

3 To provide you with an increasing, regular income ITS AIMS To provide you with a regular increasing income if, as a result of sickness or accident, you are unable to work, and this results in a loss of earnings. To offer you the choice when you take out the Plan of deciding how long this income is paid. This will enable you to allow for any period when you expect your earnings to continue and the length of time you wish to be insured. To provide cover for the duration of the Plan irrespective of how many claims you make. YOUR COMMITMENT You agree to disclose any requested information in support of your Plan. If you do not, your cover could be affected. You agree to pay regular monthly or annual contributions throughout the duration of the Plan. Contributions will increase each year if you choose to increase your benefit to make allowance for cost of living and earnings increases. If you stop your contributions your cover may cease and there will be no cash value. You must notify us within the stated time limits of any claim you wish to make. You agree to inform us of your incapacity as detailed in the When to inform us of your incapacity section later in this booklet. You select an appropriate level of cover and review it regularly to make sure you have enough for your needs, but not more than we will pay. RISK FACTORS If you stop paying your contribution, cover will cease (contributions are not payable when you are receiving benefits). You may need to increase your contributions when your plan is reviewed which is normally after 5 years (but may be sooner) and thereafter as required, if you wish to maintain your chosen level of benefit. If you do not regularly review the benefit against your current earnings, it may be insufficient to continue meeting your needs. If your earnings at the time of claim are below the level needed to justify the level of benefit you have chosen, you will receive a reduced benefit but no refund can be made for any part of the contributions paid. Certain causes of claim are excluded. Refer to the When will the plan not pay out? section later in this booklet. The payment of benefit under this plan may affect your eligibility to claim for some means tested benefits provided by the State. Under current regulations, your entitlement to State Incapacity Benefit will not be affected. However, State Benefit rules may change in the future. Under current Inland Revenue rules, all benefits payable under your Plan are free from Income Tax and Capital Gains Tax, but this may change in the future if the Inland Revenue alter their rules. 1

4 QUESTIONS AND ANSWERS WHAT IS THE ST. JAMES S PLACE INCOME REPLACEMENT PLAN? It is a Plan designed to pay you a regular benefit if you suffer illness or injury leading to a loss of earnings.you select the features of the Plan to make sure the cover is right for you. You decide: the amount of benefit you require how soon you need the benefit to start for how long you need the benefit to be paid and for how long you want the cover to last. You pay regular contributions to maintain your cover. We provide cover until your plan expires no matter how many claims you make. You notify us when sickness or an accident has stopped you from working. We pay you a monthly, increasing income from the end of your chosen deferred period for as long as you meet the claim s criteria. HOW DO I DECIDE WHAT FEATURES TO CHOOSE TO MEET MY NEEDS? This section explains the choices you have when setting up your Plan. THE AMOUNT OF BENEFIT THAT CAN BE PAID You choose the amount of benefit you need. Income Tax and National Insurance Contributions are deducted from your normal earnings but not from the benefits we will pay you. For this reason the maximum benefit available is 65% of the first 45,000 of your pre-disability earnings and one third of earnings thereafter, less deductions for State Benefits. The overall maximum benefit is 120,000 per annum. Refer to the Other Income That May Reduce Your Benefit section later in this booklet. In addition to the above you may cover contributions into your approved pension plan. The maximum is 17.5% of earnings or an amount equal to payments made in the preceding 12 months whichever is the lower. From the start of the sixth year, when you are in receipt of benefit, the maximum allowable benefit to cover pension contributions will be reduced, in accordance with current pensions legislation, to 3,600 for the tax year 2004/2005. Please note that if the Plan is company owned, different rules apply for covering pension contributions. Please ask you St. James's Place Partner for details. THE EARNINGS UPON WHICH TO BASE YOUR COVER The maximum benefit available is based on your pre-disability earnings: If you are employed,this means your pre-tax earnings for PAYE assessment purposes in the 12 months before you became unable to work. If you are self-employed,this means your share of pre-tax profit from your trade, profession or vocation for the 12 months before you became unable to work after deduction of trading expenses. 2 You choose the amount of benefit you need.

5 Once you start receiving benefit it will automatically increase each year in line with the Average Earnings Index We will require financial information to support your claim. Income received from savings and investments will not be included or taken into account in the event of a claim. HOUSEWIVES AND HOUSEHUSBANDS COVER A housewife or a househusband can take out cover for a maximum benefit of 1,000 per month. Benefits are payable in the event that incapacity prevents you undertaking three or more Measurements of Daily Activities following a deferred period of at least 13 weeks. Please refer to the Plan Conditions for full details. INCREASING YOUR COVER You may choose to increase your cover by a set percentage or in line with earnings (as determined by reference to the annual percentage change in the index of National Average Earnings (AEI)) when you take out this Plan. You may increase your cover by making a further application to us which may be subject to a fresh assessment of your health, occupation and pastimes. This increase will also be subject to the maximum allowable for your present earnings. Whenever your Income Benefit is increased, including any increase as a result of indexation, your contributions will go up by a greater proportion than the increase in benefit because the risk of becoming unable to work due to sickness or disability increases with age. INCREASING YOUR BENEFIT PAYMENTS Once you start receiving benefit it will automatically increase each year in line with the Average Earnings Index, i.e. AEI (up to a maximum of 15%). WHEN BENEFIT PAYMENTS START Benefit payments will commence one month after the end of the deferred period and monthly in arrears from then on, provided you are still unable to work. The deferred period is the period from when you are first unable to work for which we do not pay benefit.you choose how long this period is when you take out the Plan and it is stated in your Plan Schedule.You can choose between 4, 13, 26 and 52 weeks. You may also choose to split your benefit so that it becomes payable following two separate deferred periods. You should allow for any earnings that you expect to continue after you stop working, such as sick pay or for how long you are prepared to live on your savings. HOW LONG WILL THE BENEFITS BE PAID FOR? Benefits will be paid until the end of the Plan term, or until you are fit to return to work, which ever happens first. HOW LONG SHOULD COVER LAST? You choose for your Plan to end when you think you will no longer need the benefits. This should be no later than your planned retirement date, or age 65 if younger.the minimum term is 5 years. MEDICAL AND OTHER DETAILS WE MAY NEED You will be asked to complete a health questionnaire, which may need to be supported by a report from your doctor and a medical examination. 3

6 HOW FLEXIBLE IS THE PLAN? This section details the choices available once the plan has commenced. REGULAR REVIEW OF YOUR COVER You should regularly review the amount of cover you have in relation to your earnings and living expenses. If you are promoted or move to another employer (and remain in the same occupation) and your earnings increase, you may increase your cover by up to 25% without the need to provide any new medical information.to take advantage of this option, you need to apply within 2 months of your promotion or change of employer. Please refer to the Plan Conditions for full details. CHANGING OCCUPATION You do not need to tell us if you change your occupation after the Plan has commenced. BECOMING UNEMPLOYED Becoming unemployed will not give rise to a claim for benefit. Cover will continue but your Plan provisions will change as follows: the maximum benefit you can have is 1,000 per month; the minimum deferred period will be 13 weeks; and your claim will be based on failure of three or more Measurements of Daily Activities. GOING ON MATERNITY LEAVE During maternity leave your chosen benefit remains in place.thereafter, if you choose not to return to work, a maximum of 1,000 per month is payable.when you elect this option, we will adjust your contribution to take into account the new benefit level. In both cases, a claim will be payable in the event that you are unable to undertake three or more Measurements of Daily Activities. If you subsequently return to work, your income protection benefit can be restored to its original level subject to you continuing to be in good health. Your contribution level will again be readjusted to take into account your increased benefit level. Please refer to the Plan Conditions for full details. you may increase your cover by up to 25% without the need to provide any new medical information. 4

7 The terms of your plan are not affected by the number of times you claim. WHEN WILL THE PLAN PAY OUT? WHEN TO CLAIM You can claim when you are unable to work, because of sickness or accident, resulting in a loss of earnings and if you are receiving regular medical care and supervision for your condition. WHEN TO INFORM US OF YOUR INCAPACITY You should inform us as soon as possible and before the end of your (first or only) deferred period. THE EXTENT OF INCAPACITY Benefits are usually payable if (in our opinion) you are totally unable to perform your normal occupation, as detailed in your Plan Conditions, (and are not following any other occupation for profit or income), as a result of an accident or illness. If, prior to claiming benefits, you are engaged in more than one occupation, benefits will be payable if you are unable to perform the covered occupation. For certain specialist occupations, benefits will continue to be paid after 12 months only if you are unfit to undertake any occupation to which you are suited by education, training or experience.we will tell you in advance if this definition will apply to your Plan. Please refer to the Plan Conditions for further details of our claim conditions. HOW WE WILL ASSESS YOUR CLAIM We will look at the duties of your occupation, your ability to do them and whether adjustments can be made to help you to do them.you will qualify for benefit if you are unable to perform the essential duties of your occupation and are not doing any other work (unless you were carrying out this second occupation before you claimed). We will ask you for evidence of lost earnings to help us assess your claim HOW LONG THE BENEFIT IS PAID Your benefit will be paid until the first of these events: a) you are no longer incapacitated; b) you are no longer suffering a loss of earnings; c) the plan term ends; or d) your death. CLAIMING AGAIN AFTER RETURNING TO WORK The terms of your Plan are not affected by the number of times you claim. If you have received benefit and claim again for the same cause within 6 months of returning to work, the deferred period will not apply.you must resume payment of contributions on returning to work to maintain your cover. RETURNING TO WORK PART T I M E OR TO A LESS WELL PAID POSITION Providing you have been in receipt of full benefit previously, we will pay you a reduced benefit, taking into account your new earnings, up to the value of your full claim amount.this is called Rehabilitation Benefit. Rehabilitation Benefit is conditional upon you being totally unable, as a result of an accident or illness, to continue in your former occupation. If you return to the same employment, but in a reduced capacity, we will pay the benefit for a maximum of 52 weeks. 5

8 HOW AND WHEN BENEFITS ARE PAID Benefits are payable at the end of the deferred period and will be paid by cheque, direct to you, monthly in arrears.you will receive your cheque by the 1st of each month. CONTRIBUTION PAYMENTS WHEN CLAIMING You should continue to pay your contributions until your claim is accepted and until the end of your deferred period.you will not need to pay at the end of the deferred period. OTHER INCOME WHICH MAY REDUCE YOUR BENEFIT We will reduce your benefit if any of the following take your income in claim over the maximum allowable: ongoing payments from your employment such as sick pay. pension payments (unless you would have received them if you were still working or unless pension payments were being paid prior to claiming on the Income Replacement Plan) and other insurance payments triggered by your incapacity that result in regular payments to you. Refer to the section The Amount Of Benefit That Can Be Paid, which is earlier in this booklet. If your benefit is reduced we don t refund any of your contributions to you, which is why we ask you to review your cover regularly to ensure that it is still suitable to meet your needs. We won t reduce your benefit if you receive: Social Security benefits such as: Incapacity Benefit, Income Support or other means tested benefits. Investment income. (However, if this plan is taken out specifically to cover any dividend income from your company then this would have to cease, should you become incapacitated, before any benefits will become payable.) WHEN WILL THE PLAN NOT PAY OUT? We will not pay Benefits in respect of incapacity if it arises directly or indirectly from any of the following: a) self-inflicted injury while sane or insane; b) the misuse of prescribed, non-prescribed, illegal drugs or alcohol; c) unreasonable failure to seek or follow medical advice as directed by a registered medical practitioner; d) active participation in any criminal act; e) insurrection, war (whether declared or not declared) or any act incidental to war or service in the armed forces of any country at war; f) if a claim arises as a result of HIV or AIDS, unless specifically exempted (full details of our approach to HIV and AIDS is detailed in our Plan Conditions); g) Incapacity attributable to pregnancy or childbirth or complications arising there from (unless incapacity extends beyond a date 13 weeks after the conclusion of such pregnancy, in which case incapacity shall be deemed to have commenced 13 weeks after the conclusion of the pregnancy). Full details of the exclusions and limitations are contained in the Restrictions on the payment of Benefits section of the Plan Conditions. 6

9 BENEFIT PAYMENTS WHEN YOU ARE NOT IN THE UK Benefits will continue to be paid if you reside in or travel to Australia, Austria, Belgium, Canada, Channel Islands, Denmark, Finland, France, Germany, Greece, Gibraltar, Isle of Man, Italy, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Republic of Ireland, Spain, Sweden, Switzerland or the United States of America. If during the claims period you reside in, or travel to, any country (other than those set out above) for a period or periods totaling more than 26 weeks, no Benefits will be payable in respect of the period in excess of 26 weeks. the level of your cover may be increased for the same contribution. WHAT WILL MY CONTRIBUTIONS BE? Your personal illustration will show the normal contribution and cover you have chosen. Your contributions depend on your age, sex, occupation, pastimes, smoking habits, medical history and upon the level and features of the cover you choose.we will inform you of the actual contribution required once we have assessed the information requested. Payments to us are by monthly direct debit or yearly by cheque. HOW ARE MY CONTRIBUTIONS REVIEWED? We calculate the contributions after making certain assumptions about investment returns, the cost of the protection benefit and the costs of providing and maintaining the Plan. These assumptions will be reviewed, at our discretion, normally after 5 years and thereafter as required to ensure that the contributions remain sufficient to support the chosen level of benefit. In exceptional circumstances reviews may take place at other times. Exceptional circumstances may include for example where our claims experience, the costs of providing and maintaining your Plan, such as administrative, reinsurance, distribution or other expenses, or the investment returns differ or are likely to differ significantly from the assumptions made when the level of your contributions was set. If things turn out worse than assumed you will have the option to increase your contributions in order to maintain your level of benefit. Alternatively you may reduce the level of benefit for the same contribution. If you decide to increase your contributions in order to maintain your level of benefit, we will issue the increase as an ad hoc increase, except that you will not have to provide evidence of your continued good health or insurability. If things turn out better than assumed you may be able to increase the level of your cover for the same contribution. This increase may be subject to underwriting. Alternatively you may be able to maintain the same level of benefit but reduce your contributions. 7

10 WHAT HAPPENS IF I DIE? If you die during the term of the Plan then, unless we are paying you benefits at that time, we will pay your estate a sum equivalent to the contributions paid or payable during the first 12 months of the existence of the Plan. If, however, you are in receipt of benefits when you die we will pay your estate a sum equivalent to 12 months income benefit, based on the monthly benefit you were receiving immediately prior to your death. WHAT ARE THE CHARGES? The contribution payment shown in your personal illustration include all the costs of providing and maintaining your plan and the fees for any medical examinations we ask you to attend. WHAT IF I STOP PAYING MY CONTRIBUTIONS? Your Plan and cover will cease.you will not receive any money back. DOES THE PLAN HAVE A CASH IN VALUE? Your Plan has no cash in value at any time. IS MY BENEFIT TAXABLE? No, under current UK legislation your benefit will not be subject to UK Income Tax. Details are given in the Further Information section. There is no tax relief on your contributions. CAN I CHANGE MY MIND? After we accept your application we will send you a Cancellation Notice. If you do not wish to proceed with the cover, please complete this Notice and return it to us. THE ST. JAMES S PLACE PARTNERSHIP The St. James s Place Partnership is an elite group, made up of many of the most experienced, able and highly-regarded professionals working in financial services today. The Partners so called because of their common purpose and shared values work from a network of offices across the UK. On average, they have 14 years experience in financial services: only a small proportion of financial advisers can meet our selection criteria. OUR GUARANTEE The St. James s Place Group stands behind and guarantees the advice given by members of the St. James s Place Partnership when recommending any of the products or services provided by companies within the St. James s Place Group. 8

11 FURTHER INFORMATION CANCELLATION RIGHTS You have the right to cancel this Plan. Should you wish to exercise this right you may either write to us at St. James s Place Administration Centre, PO Box 64, Craigforth, Stirling FK9 4YS or, once the application has been accepted, complete and return the cancellation notice provided.you will have 30 days in which to change your mind. HOW DOES TAXATION AFFECT THE PLAN? Normally the benefits of the Plan are free of all United Kingdom personal Income and Capital Gains Tax. Should the Plan be held under the terms of a suitable trust there would be no Inheritance Tax liability on the death of the Life Assured. Details of suitable trusts are available on request. The position for company owned plans may be different please consult your St. James s Place Partner for further details. LAW The law of England and Wales will apply to this contract and the English Courts shall have exclusive jurisdiction in relation to it. CONTRIBUTIONS Monthly or annual contributions are paid by direct debit. TERMS AND CONDITIONS This booklet and the enclosed free standing illustration (including charges) provide a broad outline of the Plan and do not contain all of the conditions or exclusions which may apply to various benefits and options under the Plan. Full details can be found in the Plan Conditions, a copy of which is available on request. MAKING A CLAIM You, or your St. James s Place Partner, should contact the Company s Administration Centre, PO Box 64, Craigforth, Stirling FY9 4YS or telephone to request a claim form.you need to notify the Company s Administration Centre within 2 weeks after the incapacity arose, if the first or only deferred period is 4 or 13 weeks and, within 8 weeks where other deferred periods apply, otherwise your claim may be delayed. In the case of a death claim this should be as soon as possible. Full details can be found in the Plan Conditions, a copy of which is available on request. TERMINATING YOUR PLAN You, or your St. James s Place Partner, should contact the Company s Administration Centre. If your bank is sending your contributions to us, and you wish to terminate your Plan, you should also ask them to stop payment. COMPENSATION ARRANGEMENTS Detailed information as to the compensation arrangements that will apply to the contract under the Financial Services Compensation Scheme, are available from the Company s Head Office on request. COMPLAINTS For further information, or, if you wish to complain about any aspect of the service you have received, please contact St. James s Place at the address below. If your complaint is not dealt with to your satisfaction you can complain to the Financial Ombudsman Services, South Quay Plaza II, 183 Marsh Wall, London E14 9SR, telephone Making a complaint will not prejudice your right to take legal proceedings. CLIENT IDENTIFICATION REQUIREMENTS It is a requirement of our Regulator, the Financial Services Authority, that under certain circumstances we obtain satisfactory evidence of identity of all parties involved in applications to the St. James s Place Group for any of our products.your St. James s Place Partner will provide you with details, or alternatively you may contact our Administration Centre on THE ASSOCIATION OF BRITISH INSURERS (ABI) The ABI Guide to Critical Illness General Information about critical illness cover is contained in the ABI (Association of British Insurers) Guide to Critical Illness.You can obtain a copy by writing to the ABI at 51 Gresham St, London EC2V 7HQ. The ABI Statement of Best Practice for Critical Illness Cover This booklet complies with the ABI Statement of Best Practice for Critical Illness Cover, which is a voluntary agreement between member companies to promote clarity and uniformity. This booklet is a guide to the Income Replacement Plan and is based on our understanding of current law and Inland Revenue practice. Further details are contained in the Plan Conditions, which make up the plan. We recommend you seek specialist advice about the legal and tax information contained in this leaflet. ST. JAMES S PLACE UK plc is a company incorporated under The Companies Act 1985 and is a company limited by shares. Head Office address is St. James s Place House, Dollar Street, Cirencester, Gloucestershire, GL7 2AQ, United Kingdom. (Tel )

12 The St. James s Place Group provides investment management, risk management and banking products and services. Members of the St. James s Place Group are authorised and regulated by the Financial Services Authority. The St. James s Place Partnership and the title Partner are the marketing terms used to describe the representatives of St. James s Place (FSA Register Number ). St. James s Place UK plc: Registered Office St. James s Place House, Dollar Street, Cirencester, Gloucestershire, GL7 2AQ, United Kingdom. Registered in England Number SJP116-VR6 (01/05)