Tax Advantaged Life Assurance Plan

Transcription

1 Key features of the Tax Advantaged Life Assurance Plan NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 1 of 10

2 This key features document gives you the main points about the plan. Please read it carefully and keep it with your other plan documents. Its aims To provide a cash sum called life cover under personal pension plan rules that allow you to get tax relief on your payments if you qualify. To pay out a cash sum if you die during the plan s term. The term is the number of years the plan will run. To pay out a cash sum early if, before the last 12 months of the plan s term, you are diagnosed with a terminal illness and are expected to live less than 12 months. Your commitment To make regular payments over the plan s term. To give us all the information we ask for when applying for your plan and when claiming your benefit. If you don t, we won t pay your claim. To tell us immediately if you move permanently from the UK. To tell us if you take up any hazardous leisure activities, or if there is any change to: your personal health your family medical history your occupation your place of residence between fully completing the application form and when your plan starts. If you don t do this, your plan won t pay out. To give us accurate information about all your pension plans if we ask you to. To tell HM Revenue & Customs if you pay more than the annual contribution allowance into your pension plans or you exceed the lifetime allowance. Please see What about tax? for more details. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 2 of 10

3 Risk factors If you don t make your payments, your plan will end. Your cover will stop 30 days after the last payment is due and you ll get nothing back. The plan has no cash-in value at any time. Tax benefits may change. They are not guaranteed. We won t pay out if you don t disclose any information we request. We may apply specific exclusions when we accept your plan. If this happens, we ll tell you in your acceptance letter and plan schedule. The life cover, if it pays out, counts towards your overall lifetime allowance. Please see What about tax? for more details. This means there will be a tax charge, of up to 55%, if the total value of benefits from all your pension arrangements exceeds the lifetime allowance at the time they are taken. If you make payments up to a certain amount, called the annual contribution allowance, they will attract tax relief. If you pay more than this allowance, you have to pay tax at 40% on the excess. Please see What tax relief do I get on my payments? for more details. If you become unemployed, your payments can t exceed 3,600 a year, which means your cover may have to reduce. If this happens, the plan may not give you the level of protection you need. If you move permanently from the UK, you may have to cancel the plan. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 3 of 10

4 Questions and answers What is a Zurich Tax Advantaged Life Assurance Plan? It s an insurance plan that complies with personal pension plan rules. These rules allow those who qualify, to get tax relief on their payments. It pays out a cash sum if you die during the plan s term. The cash sum will be paid out early if, before the last 12 months of the plan s term, you are diagnosed with a terminal illness and are expected to live less than 12 months. The plan does not pay you a pension. You should speak to your adviser if you have any queries about this. You must be at least 16 when the plan starts. The maximum age you can be when the plan starts is 68. The plan must end when you reach 70. The plan can cover one person only; it can t cover two people jointly. What tax relief do I get on my payments? You get tax relief on your payments to the plan. In any tax year (a tax year runs from 6 April in one year to 5 April the next year) tax relief will be allowed on payments up to 3,600 or 100% of your relevant UK earnings, whichever is more. If your total payments to all registered pension schemes are more than the annual contribution allowance, any payments above the allowance will be subject to a tax charge. This includes any pension plans you have that your employer pays into. The annual contribution allowance is shown in the following table. If you make any payments above these allowances you will have to pay tax at 40% on the excess, through your tax return. Tax year Annual contribution allowance 2006/7 215, /8 225, /9 235, /10 245, /11 255,000 Tax benefits may change. They are not guaranteed. How flexible is it? The plan may include a guaranteed insurability option. This means there are various events where you can increase your cover, subject to the limits covered in the terms and conditions, without having to give us any more details about your health or activities. Your plan schedule says whether this option is included. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 4 of 10

5 Questions and answers (continued) You must be 54 or younger to use this option. The events are increasing your mortgage, getting married or divorced, entering into or ending a civil partnership, having a child or legally adopting a child, or increasing your salary following a promotion or change of job. For more information on the guaranteed insurability option and the limits that apply, please see Section 5 of the terms and conditions. When does the plan pay out? It pays out if you die during the plan s term. The cash sum will be paid out early if, before the last 12 months of the plan s term, you are diagnosed with a terminal illness and are expected to live for less than 12 months. You can tell us who you d like the life cover paid to by completing a Nomination of Beneficiary form and returning it to Zurich. You can send us an updated Nomination of Beneficiary form at any time. What will stop the life cover paying out? We won t pay out the life cover if you haven t made all your payments. We won t pay out if you commit suicide within 12 months of the date the plan started or is reinstated. Instead, we ll refund the payments you ve made. If you have used the guaranteed insurability option to increase the benefits and you commit suicide within 12 months of the increase, we ll pay the amount of life cover before the increase and refund the payments you ve made for the increase in your life cover. We won t pay out if you are diagnosed with a terminal illness within the last 12 months of the plan s term and survive until the plan ends. What other benefits can I choose? You can choose to index your life cover so that it automatically increases each year in line with the rise in the Average Earnings Index or Retail Prices Index or 5% or 10% (as you choose). If you choose to index your cover in line with the Average Earnings Index or the Retail Prices Index, any increase will be restricted to 10% each year. Your payments will increase each year to pay for the higher amount of cover. The cost of the extra cover will be based on your sex, your age at that time, whether you smoke and the number of years left until the end of the term. If you don t include this benefit, your amount of life cover will stay the same. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 5 of 10

6 Questions and answers (continued) What will my payments be? If you would like a personal illustration showing who is covered by the plan and the cost, please ask your adviser. You get basic rate tax relief on the payments to the plan. The current minimum payment amount you can make is 10 a month before basic rate tax has been deducted ( 7.80 after basic rate tax relief has been deducted). If you use the guaranteed insurability option to increase your cover, the minimum increase you can make, before basic rate tax relief is deducted, is currently 6 a month. The payment depends on the amount of cover you ve chosen, the term of your plan, your age, your sex and whether you smoke. You must make payments monthly by direct debit. Can my payments change in the future? Your payments will not change throughout the term you have chosen unless you include the indexation benefit or use the guaranteed insurability option to increase the plan later. As you make payments after basic rate tax has been deducted, your payments will change if the basic rate of tax changes. What if I stop paying? If you stop making payments, your cover and plan will end 30 days after the last payment is due. You won t get any of your payments back. What about tax? You ll make payments after basic rate tax has been deducted. Details of the tax relief available are on page 4. We ll claim the tax relief for you from HM Revenue & Customs. If you re a higher rate taxpayer, you claim your extra relief through your tax return. You won t have to pay income or capital gains tax on any benefits the plan pays out. The plan is written under a master trust, which means the benefit should not be liable to inheritance tax. The life cover this plan pays out, and any other personal or occupational pension life cover plans you have that pay out, plus the total pension fund you build up from all your pension schemes, is limited to the lifetime allowance set by HM Revenue & Customs. The limit that applies for the first five years is: Tax year Lifetime allowance 2006/7 1,500, /8 1,600, /9 1,650, /10 1,750, /11 1,800,000 NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 6 of 10

7 Questions and answers (continued) So any life cover paid out counts towards your lifetime allowance. This means there will be a tax charge, of up to 55%, if the total value of benefits from all pension arrangements exceeds your lifetime allowance at the time your benefits are taken. If you exceed the annual contribution allowance or the lifetime allowance, you will need to include this information in your tax return. If you have any doubts about whether this may apply to you, you should talk to your adviser. Registering with HM Revenue & Customs for protection may help you reduce or avoid these tax charges. We ve based this information on our understanding of current UK law and HM Revenue & Customs practice. Future changes in law and tax practice or in your own circumstances could affect how much you pay. Can I change my mind? You can change your mind within 30 days of getting your plan documents. Other documents we send you at the time explain how to cancel and when the 30-day period starts and ends. If, within this cancellation period, for any reason, you decide that you don t want the plan we ll give you your money back. Will I get regular updates on my plan? To make sure your plan continues to meet your needs you should regularly review your amount of cover. We ll send you a statement each year to help you. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 7 of 10

8 Other information How to complain If you ever need to complain, contact us at the address on page 9. You can get details of our complaints handling process on request. If you re not satisfied with our response, you can complain to: Financial Ombudsman Service South Quay Plaza 183 Marsh Wall London E14 9SR Telephone: Complaining to the Ombudsman won t affect your legal rights. Terms and conditions This key features document gives a summary of the Zurich Tax Advantaged Life Assurance Plan. It doesn t include all the definitions, exclusions, terms and conditions. Law The law and courts of England and Wales will be used to decide any dispute. Compensation Your adviser will recommend products that are suitable for your needs. You have a legal right to compensation if, at any time, an authority decides that a recommendation was unsuitable when it was made. If we re unable to meet our financial obligation in full, you may be entitled to help from the Financial Services Compensation Scheme (FSCS). The amount of compensation you ll receive will be based on the scheme rules. If you need more information, you can contact the FSCS helpline on or visit their website at If you d like more information about compensation, please contact us and ask for the Compliance Officer. If you d like a copy of the full terms and conditions, please ask your adviser or contact us direct. We have the right to change some of our terms and conditions. We ll write and tell you if we make any changes. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 8 of 10

9 How to contact us Your adviser will normally be your first point of contact. We won t be able to give you any financial advice. To make a claim, you or the person dealing with your affairs should contact your adviser or write to the Claims Department at the address shown below. We ll let you or your representative know what information we need so that we can process the claim as quickly as possible. If you have any questions at any time, you can phone or write to us. Phone: between Monday and Friday 8.30am to 6pm. We may record or monitor calls to improve our service. Write to: Zurich Assurance Ltd UK Life Centre Station Road Swindon SN1 1EL We want everyone to find it easy to deal with us. If you need information on our plans in a different format, just let us know and we ll provide it. All our literature is available in large print, Braille and on audio tape or CD. If you are a textphone user, we can answer any questions you have through a Typetalk Operator. Call us on Or, if you d prefer, we can introduce your adviser to a sign-language interpreter. NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 9 of 10

10 Please contact us or your adviser if you would like this in large print, Braille or on audio tape or CD. NP120003A01 (04/06) MR Zurich Assurance Ltd, authorised and regulated by the Financial Services Authority for its life assurance, pension and investment products. Registered in England Registered office: UK Life Centre, Station Road, Swindon, SN1 1EL. Telephone: NP120003A01 (PW119130A01) Tax Advantaged Life Assurance Plan KFD Page 10 of 10