Prudential Protection. Plan Rules for Life Policy and Unemployment Policy

Transcription

1 Prudential Protection Plan Rules for Life Policy and Unemployment Policy

2 Contents Page General Description 3 The Life Policy 4 L1 Introduction 4 L2 Life Cover and Critical Illness Cover Benefits 4 L3 Premiums 5 L4 Non-Payment of Premiums 5 L5 Surrender Value 6 L6 Critical Illness Cover 6 L7 Waiver of Premium Benefit 11 L8 Mortgage Payment Benefit 14 L9 Guaranteed Insurability Option 18 L10 General 20 L11 Customer Complaints 20 The Unemployment Policy 21 U1 Introduction 21 U2 General Definitions 21 U3 Definitions of Unemployment/Unemployed 22 U4 Premiums 22 U5 Surrender Value 22 U6 Unemployment Cover 22 U7 Period of Unemployment Cover 23 U8 Calculation of Maximum Unemployment Cover 23 U9 Amount of Unemployment Cover Payments 24 U10 Payment of Unemployment Cover 24 U11 Maximum Amount of Unemployment Cover 24 U12 Maximum Amount of Unemployment Cover Contract Workers 24 U13 Maximum Amount of Unemployment Cover Temporary Employment 24 U14 Periods of Unemployment Cover and Waiver of Premiums 25 U15 Age Limit for Unemployment Cover 25 U16 When Unemployment Cover will not be paid 26 U17 How to Claim Unemployment Cover 26 U18 Geographical Limits/Moving Abroad 27 U19 Cancellation of Unemployment Cover 27 U20 Fraud 27 U21 General 27 U22 Customer Complaints 27 U23 St Andrew s Insurance plc 27 2 Prudential Protection Rules

3 General Description A Prudential Protection plan (the plan ) is a regular premium arrangement providing a selection of benefits selected by you. The plan may be made of two contracts. Pages 4 21 of this document comprise the life policy terms and conditions under which The Prudential Assurance Company Limited will provide life insurance, critical illness and other benefits. Pages comprise the separate unemployment policy terms and conditions under which, currently, St. Andrew s Insurance plc will provide cover in respect of unemployment. The life policy confirms that you have a contract with The Prudential Assurance Company Limited. If you have selected Unemployment Cover, the unemployment policy confirms that you have a contract with a General Insurer. Currently, this General Insurer is St Andrew s Insurance plc. Prudential Distribution Limited, who administer the business of The Prudential Assurance Company Limited, will also provide administration services in respect of the unemployment policy on behalf of the General Insurer. The General Insurer will have the right to: > assign the unemployment policy to another General Insurer, or > cancel Unemployment Cover and offer alternative cover with another General Insurer, without your consent, subject to giving you 30 days notice. If they do so, they will tell you and give you details of any changes to the unemployment policy. The General Insurer can cancel Unemployment Cover, without offering alternative cover, by giving you 90 days notice. Each policy was set up by the application and declaration which you have made and which we have accepted. If you pay the premiums stated on the schedule to us, we will pay the benefits described in the rules and schedule to you or to whoever is entitled to them. Full details of how we will operate the policies are stated in these Rules for Prudential Protection ( the rules ) and on the schedule. Prudential Protection Rules 3

4 The Life Policy L1 Introduction L1.1 Rules and Schedule These rules and the schedule with them form the life policy. The life policy confirms that you, the person or persons named as the Planholder or Planholders on the schedule, have a contract with us, The Prudential Assurance Company Limited (the Company). These rules are written in such a way that they read correctly if you, the Planholder or Planholders, are not the Life Assured or Lives Assured, but for many plans you will also be the Life Assured or Lives Assured. These rules are written using masculine words such as he or his. When the person to whom they refer is female, the feminine word, such as she or her, should be substituted. L1.2 Definitions In the rules: > plan anniversary is any anniversary of the Date of Currency. > premium is the total premium of the plan. > premium due date is any date on which a premium is due to be paid. Other terms in the rules refer to persons, dates or figures which are stated on the schedule. These include Life Assured or Lives Assured, Life Cover, Basic Critical Illness Cover, Mortgage Payment Benefit, Date of Currency and Date of Expiry. 4 Prudential Protection Rules L2 Life Cover and Critical Illness Cover Benefits L2.1 Date of Claim The Life Cover and Critical Illness Cover benefits from the life policy will be payable on the Date of Claim. If only one person is named as the Life Assured on the schedule, the Date of Claim will be the earlier or earliest of: > the date of death of the Life Assured, and > the date of diagnosis that the Life Assured is suffering from a Terminal Illness (as defined in rule L2.3 below), and > if an amount of Basic Critical Illness Cover is shown on the schedule, the survival of the Life Assured for a period of 28 days after the date of the diagnosis that the Life Assured is suffering from a Critical Illness, as defined in rule L6 below (except in Major Head Trauma (see rule L6.1 (18)), Multiple Sclerosis (see rule L6.1 (21)) and Total Permanent Disability (see rule L6.1 (26)), where the Date of Claim will be survival of the Life Assured to the end of the relevant period), but the Date of Claim will not be after the Date of Expiry shown on the schedule. If two people are named as the Lives Assured on the schedule, the Date of Claim will be the earlier or earliest of: > the date of death of the first to die of the Lives Assured, and > the date of diagnosis that a Life Assured is suffering from a Terminal Illness (as defined in L2.3 below), and > if an amount of Basic Critical Illness Cover is shown on the schedule, the survival of a Life Assured for a period of 28 days after the date of the diagnosis that that Life Assured is suffering from a Critical Illness, as defined in rule L6 below (except in Major Head Trauma (see rule L6.1 (18)), Multiple Sclerosis (see rule L6.1 (21)) and Total Permanent Disability (see rule L6.1 (26)), where the Date of Claim will be survival of the Life Assured to the end of the relevant period), but the Date of Claim will not be after the Date of Expiry shown on the schedule. L2.2 Amount of Benefit Following the Date of Claim, we will pay to you, or to whoever is entitled to the benefits of the plan, a sum calculated as follows: If the event giving rise to the claim is the death of the Life Assured or of the first to die of the Lives Assured or the diagnosis that a Life Assured is suffering from a Terminal Illness, we will pay the amount of Life Cover stated on the schedule. If the event giving rise to the claim is the survival of a Life Assured for a period of 28 days after the diagnosis of a Critical Illness, we will pay the amount of Basic Critical Illness Cover shown on the schedule and, if the schedule shows an amount of Critical Illness

5 Top-Up Cover, we will add to the Basic Critical Illness Cover the amount of the Critical Illness Top- Up Cover shown on the schedule. After payment of the Life Cover or Critical Illness Cover benefits, the plan will come to an end. L2.3 Definition of Terminal Illness Terminal Illness Advanced or rapidly progressing incurable illness where, in the opinion of an attending consultant and our Chief Medical Officer, the life expectancy is no greater than 12 months. L3 Premiums L3.1 Amount of Premiums The premium for this plan is made up of a premium for the life policy and, if you have selected Unemployment Cover, a premium for the unemployment policy. The premium for the life policy will not increase except where Unemployment Cover is also selected and the premium for this cover increases (see rule U4). This will result in a corresponding increase to the premium for any applicable Waiver of Premium Benefit. The premium for the unemployment policy may change. You will receive 30 days notice before any change is made setting out your options. Full details can be found in rule U4 of the unemployment policy. Premiums will reduce if any of the benefits selected by you cease before the Date of Expiry. L3.2 Payment of Premiums The initial amounts of the yearly or monthly premiums are shown on the schedule. The yearly or monthly premium due dates are calculated from the Date of Currency on the schedule. The last premium is due to be paid on the earlier of the last premium stated on the schedule and the premium due immediately before the date the Life Cover or Critical Illness Cover benefits become payable (see rule L2). Monthly premiums must be paid by Open Direct Debiting Instruction unless we allow another method. Monthly premiums should be paid on the premium due date. Yearly premiums (other than the first) should be paid during the month commencing on the premium due date ( the month of grace ). There is no month of grace for the first yearly premium. The consequences of not paying a premium, or of paying it late, are set out in rule L4. L3.3 Frequency of Payment In your application and declaration you have told us if you wish to pay premiums yearly or monthly. If you ask us in writing to do so, we will alter the frequency from the next anniversary of the Date of Currency. L4 Non-Payment of Premiums L4.1 Non-Payment of Premiums If a monthly premium is not paid by the premium due date or a yearly premium is not paid by the end of the month of grace (see rule L3.2), we will cancel: > the Life Cover and all the provisions of rule L2, > the Basic Critical Illness Cover and Critical Illness Top-Up Cover, if any, and all the provisions of rule L6, > Waiver of Premium Benefit, if any, and all the provisions of rule L7, > Mortgage Payment Benefit, if any, and all the provisions of rule L8. If you have selected Unemployment Cover, we will also cancel Unemployment Cover and all the provisions of the unemployment policy. However, you may reinstate the plan in full during the 13 months starting with the premium due date of the first unpaid premium ( the 13 month period ), subject to the following conditions: > You must pay all the outstanding premiums (including any premiums varied under rule U4) and our charge for late payment (see rule L4.4 overleaf). > The amount of premium payable upon reinstatement will be that payable at the date the last premium was paid unless, during the period of non-payment, the premium would have been subject to a variation (as described in rule U4 of the unemployment policy) had the premiums continued to have been paid. In this circumstance the premium after the variation will be payable upon reinstatement. Prudential Protection Rules 5

6 > If premiums are payable monthly, we can insist that you provide us with an Open Direct Debiting Instruction to enable future premiums to be paid. > You must provide evidence of the continued good health of the Life Assured or Lives Assured and that there is no other factor which would make us wish not to cover him or them for Life Cover and (if applicable) Critical Illness, Waiver of Premium Benefit, Mortgage Payment Benefit and Unemployment Cover. > If you have selected Unemployment Cover, you must confirm that the Life Assured or Lives Assured meet the eligibility criteria for Unemployment Cover applicable at that time. There will be a 90 day waiting period from the date cover is reinstated before Unemployment Cover will be available. L4.2 Deduction of Outstanding Premium If a claim arises under the plan (see rule L2) during the month of grace when one yearly premium is outstanding, we will deduct the amount of the outstanding premium from the amount of benefit payable. L4.3 Final Lapse If you do not restore the benefits within the 13 month period, the plan will come to an end. It will not have a value. L4.4 Charge for Late Payment In this rule, when we refer to a charge for late payment, the charge will be based on our scale of charges at the time. No charge for late payment will be made on account of any delay in payment of a yearly premium up to the end of the month of grace (see rule L3.2). L5 Surrender Value If you cancel the plan, it does not have a cash value. If you have selected Unemployment Cover, you are not able to cancel either the life policy or the unemployment policy without cancelling the whole plan, except under the terms relating to cancellation rights contained within rule U4. L6 Critical Illness Cover L6.1 Definition of Critical Illness Critical Illness will mean one or more of the conditions listed and defined below. Any diagnosis must be by a medical practitioner registered in the United Kingdom whose specialism is appropriate to the cause of the claim. 1. Alzheimer s Disease/ Pre-Senile Dementia before age 65 Confirmation by a Consultant Neurologist of a definite diagnosis of Alzheimer s Disease or Pre-Senile Dementia before age 65. The diagnosis must be supported by evidence of progressive loss of ability to remember, to reason, and to perceive, understand, express and give effect to ideas. 2. Aorta Graft Surgery Undergoing surgery for disease of the aorta needing excision and surgical replacement of a portion of the diseased aorta with a graft. For this definition, aorta means the thoracic and abdominal aorta but not its branches. 3. Bacterial Meningitis Confirmation by a Consultant Physician of a definite diagnosis of Bacterial Meningitis resulting in permanent neurological or physical damage. All other forms of meningitis, including viral, are not covered. 4. Benign Brain Tumour A non-malignant tumour in the brain resulting in permanent deficit to the neurological system. Tumours or lesions in the pituitary gland are not covered. 5. Blindness Total permanent and irreversible loss of all sight in both eyes. 6. Cancer Any malignant tumour characterised by the uncontrolled growth and spread of malignant cells and invasion of tissue. The term cancer includes leukaemia and Hodgkin s disease but the following are excluded: > All tumours which are histologically described as pre-malignant, as non-invasive or as cancer in situ. 6 Prudential Protection Rules

7 > All tumours of the prostate unless histologically classified as having a Gleason score greater than 6 or having progressed to at least TNM classification T2N0M0. > All forms of lymphoma in the presence of any Human Immunodeficiency Virus. > Kaposi s sarcoma in the presence of any Human Immunodeficiency Virus. > Any skin cancer other than invasive malignant melanoma. 7. Coma A state of unconsciousness with no reaction to external stimuli or internal needs, persisting continuously with the use of life support systems for a period of at least 96 hours and resulting in permanent neurological deficit. Coma secondary to alcohol or drug misuse is not covered. 8. Coronary Artery By-Pass Surgery The undergoing of open heart surgery on the advice of a Consultant Cardiologist to correct narrowing or blockage of one or more coronary arteries with by-pass grafts but excluding balloon angioplasty, laser relief or any other procedures. 9. Creutzfeldt-Jakob Disease An unequivocal diagnosis of Creutzfeldt-Jakob Disease. This diagnosis must be made by a Consultant Neurologist. 10. Deafness Total permanent and irreversible loss of all hearing in both ears. 11. Heart Attack The death of a portion of heart muscle, due to inadequate blood supply, that has resulted in all of the following evidence of acute myocardial infarction: > typical chest pain; > new characteristic electrocardiographic changes; > the characteristic rise of cardiac enzymes, troponins or other biochemical markers; > where all of the above shows a definite acute myocardial infarction. Other acute coronary syndromes, including but not limited to angina, are not covered under this definition. 12. Heart Valve Replacement or Repair and Structural Surgery Undergoing open heart surgery from medical necessity to replace or repair one or more heart valves or to correct abnormalities in the structure of the heart. 13. HIV/AIDS as a result of a Blood Transfusion The Life Assured being infected by HIV or suffering from AIDS or any other similar or related syndrome, provided that: > the infection or syndrome is due to a blood transfusion received in the United Kingdom as part of medical or surgical treatment after the start of the plan, and > the institution which provided the transfusion admits liability. The definitions of HIV and AIDS in rule L6.3(a) apply. 14. HIV in Certain Occupations The Life Assured being infected by HIV in the circumstances described in rule L6.3(b). 15. Kidney Failure End stage renal failure presenting as chronic irreversible failure of both kidneys to function, as a result of which either regular renal dialysis or renal transplant is initiated. 16. Loss of Limbs The permanent physical severance of two or more limbs from above the wrist or ankle joint. 17. Loss of Speech Total permanent and irreversible loss of the ability to speak as a result of physical injury or disease. 18. Major Head Trauma Accidental cerebral injury resulting in permanent neurological damage. The functional impairment must have been established for a continuous period of at least six months. Prudential Protection Rules 7

8 19. Major Organ Transplant The actual undergoing as a recipient of, or inclusion on an official United Kingdom waiting list for, a transplant of a heart, liver, lung, pancreas or bone marrow. 20. Motor Neurone Disease Confirmation by a Consultant Neurologist of a definite diagnosis of Motor Neurone Disease. 21. Multiple Sclerosis A definite diagnosis by a Consultant Neurologist of Multiple Sclerosis which satisfies all of the following criteria: > There must be current impairment of motor or sensory function, which must have persisted for a continuous period of at least six months > The diagnosis must be confirmed by diagnostic techniques current at the time of the claim. 22. Paralysis/Paraplegia Total irreversible loss of muscle function or sensation to the whole of any two limbs as a result of injury or disease. The disability must be permanent and supported by appropriate neurological evidence. 23. Parkinson s Disease before age 65 Confirmation by a Consultant Neurologist of a definite diagnosis of Parkinson s Disease before age 65. Parkinson s Disease secondary to alcohol or drug misuse is not covered. 8 Prudential Protection Rules 24. Stroke A cerebrovascular incident resulting in permanent neurological damage. Transient ischaemic attacks are specifically excluded. 25. Third Degree Burns Third degree burns covering at least 20% of the body surface area. 26. Total Permanent Disability before age 60 The plan schedule states whether or not this is a condition falling within the definition of Critical Illness and, if so, which of the following definitions (a) or (b) will apply in determining whether or not there is a critical illness under this condition: (a) The Life Assured, before his 60th birthday, having become totally and permanently unable as a result of an illness or injury to engage for profit or reward in the occupation in which he was engaged immediately prior to the start of that illness or injury. If the Life Assured is not engaged in a remunerative occupation immediately prior to the start of that illness or injury the definition set out at (b) below shall apply in determining whether or not there is a critical illness under this condition. (b) Confirmation by a Consultant Physician of the total and permanent inability of the Life Assured before his 60th birthday to perform without the help of another person at least three of the following Activities of Daily Living. The Activities of Daily Living are: (i) (ii) (iii) (iv) (v) (vi) Continence the ability to manage bowel and bladder functions such that an adequate level of personal hygiene can be maintained. Dressing the ability to put on, take off, secure and unfasten all garments and, any braces, artificial limbs or other surgical appliances. Feeding the ability to feed oneself once food and drink have been prepared and made available. Mobility the ability to move from one room to another in the insured s normal place of residence. Transferring the ability to move from a bed to an upright chair or wheelchair, and vice versa. Washing the ability to wash in the bath or shower (including getting into and out of the bath or shower) such that an adequate level of personal hygiene can be maintained.

9 In both definitions of Total and Permanent Disability, the disability must have continued without interruption for 12 consecutive months or for such period as we will reasonably require to establish that the claim falls within this definition. It will be a condition of a claim that the Life Assured must also have survived to the date on which we state that we are satisfied that he is totally and permanently disabled (and not only to the end of the period of 28 days specified in rule L2). For the purposes of rule L2, the Date of Claim will be the date when we state that we are satisfied. We can alter the definition of a condition in Critical Illness or add a further condition but we will only do this if the revised definition does not reduce the extent of the cover provided by the existing definition. L6.2 When Critical Illness Cover will not be paid No condition will be accepted as a Critical Illness and no Critical Illness Cover will be available if the condition arises directly or indirectly, wholly or partly, from, or is made worse by, any of the following: > Criminal acts Taking part in a criminal act. > Drug abuse Alcohol or solvent abuse, or the taking of drugs except under the direction of a registered medical practitioner. > Failure to follow medical advice Unreasonable failure to seek or follow medical advice. > HIV/AIDS Infection with Human Immunodeficiency Virus (HIV) or conditions due to any Acquired Immune Deficiency Syndrome (AIDS). This exclusion will only apply to disabilities arising in terms of Total Permanent Disability before age 60 (see rule L6.1 (26)). A special HIV exclusion applies to Cancer (see rule L6.1 (6)). > Self-inflicted injury Intentional self-inflicted injury. > War and civil commotion War, invasion, hostilities (whether war is declared or not), civil war, rebellion, revolution or taking part in a riot or civil commotion. This exclusion does not include injuries sustained in Northern Ireland either by civilians (who were not active participants) or members of the armed forces, even if the injury was sustained while on duty. L6.3 HIV and AIDS (a) Definition For the purpose of these rules, the definition of AIDS ( Acquired Immune Deficiency Syndrome ) will be that used from time to time by the World Health Organisation or any body succeeding that Organisation or by any governmental or international organisation which we consider to have published a definition appropriate to this plan, and HIV ( Human Immunodeficiency Virus ) infection will be accepted as having occurred when a blood test indicates the presence of any HIV or any antibodies to HIV. (b) HIV in Certain Occupations In rule L6.1 (14), infection by HIV will be accepted as a Critical Illness only if: > the Life Assured s occupation is one of those listed in (c) below, and > it is established that the infection was caused by an accidental injury by a sharp instrument or by exposure to blood or blood-stained body fluid, which happened during the 12 months immediately before the date of diagnosis but after the start of the plan, and > it is established that the injury happened while the Life Assured was following the normal duties of that occupation. In addition to the general condition above, and in order to satisfy us that the Life Assured was not infected by HIV before the accident, it will be a particular condition for a claim in terms of this rule that the following sequence of events took place: Prudential Protection Rules 9

10 > The accident was reported in accordance with the established occupational procedures for such an accident. > Within five days of the accident, the Life Assured had a blood test and this test indicated the absence of any HIV or antibodies to HIV. > Within 10 days of the accident, the circumstances of the accident were reported in full to us, Prudential, at Stirling, FK9 4UE, and, in particular, it was reported that the Life Assured had had the blood test referred to in the preceding paragraph. > The accident was followed up in accordance with the established occupational procedures. > A further blood test within 12 months of the accident indicated the presence of HIV or of antibodies to HIV. (c) List of Occupations The list of occupations referred to in paragraph (b) above is as follows: > Ambulance Workers > Chiropodists > Dental Nurses > Dental Surgeons > District Nurses > Fire Brigade Firefighters > General Practitioners > Hospital Caterers > Hospital Cleaners > Hospital Doctors, Surgeons and Consultants > Hospital Laboratory Technicians > Hospital Laundry Workers > Hospital Nurses > Hospital Porters > Members of the Prison Officers Association > Midwives > Nurses employed by General Practitioners > Occupational Therapists > Paramedics > Physiotherapists > Podiatrists > Policemen and Policewomen > Radiologists L6.4 Claims Procedure for Critical Illness Cover If you wish to claim Critical Illness Cover, you must complete our claim form and must give us any information and evidence which we require regarding the nature of the Critical Illness during the six month period starting from the later of: > the date it was first diagnosed, and > the date the Life Assured was first told of the diagnosis. We may require the Life Assured to be examined by a doctor, whom we will name, and we may require the Life Assured to undergo tests which are necessary and reasonable in order to establish the nature of the Life Assured s condition (including, in particular, blood tests to establish the presence of any HIV or any antibodies to HIV). We will not be responsible for any expenses which are incurred in meeting the requirements of this rule (including travelling expenses to the place of examination by the doctor), except that any fees paid to the doctor for the examination, any fees paid to any doctor for information requested directly by us and any fees paid in connection with tests requested by us (but excluding any fee for a blood test in connection with HIV or AIDS) will be met by us. Before we will pay Critical Illness Cover, you must satisfy us that the Life Assured is suffering from a Critical Illness as defined in these rules. We will not have to pay a claim if he has refused to undergo an examination or tests which it is necessary and reasonable that he undergoes in order to establish that he is suffering from the Critical Illness. Before we will pay Critical Illness Cover, we will require proof (if not already produced) of the age of the Life Assured (or of the ages of both Lives Assured if there are two Lives Assured named on the schedule). 10 Prudential Protection Rules

11 L6.5 Children s Critical Illness Cover This rule describes the circumstances in which we will pay Children s Critical Illness Cover and the conditions which will apply. If: > the schedule shows that Critical Illness Cover applies, and > the child is a natural child, adopted child or step-child of the Life Assured or either of the Lives Assured, and > the Planholder is looking after the child or the child is financially dependent on him, and > the child, aged between one year and 18 years, is diagnosed as suffering from one of the Critical Illnesses listed in rule L6.1, and survives for 28 days after the date of that diagnosis, then we will pay you a sum equal to 50% of the sum of the Basic Critical Illness Cover and Critical Illness Top-Up Cover (if any) available at that time, subject to a maximum of 20,000, as explained below. Only one claim can be made in respect of each child and, if a claim is made in respect of one child under more than one of our policies (whether on the life of one parent or legal guardian or on the lives of different parents or legal guardians) the maximum applies to the total amount payable under all the policies. No condition will be accepted as a Critical Illness for the purposes of Children s Critical Illness Cover in any of the following circumstances: > If the condition arises directly or indirectly, wholly or partly, from, or is made worse by, any of the circumstances detailed in rule L6.2. > If the condition is a result, in any way, of a pre-existing medical condition. A preexisting medical condition is a medical condition affecting the child (whether or not a diagnosis was made or any symptoms were evident), which existed prior to any one or more of: (a) the Date of Currency, and (b) the child attaining the age of one year, and (c) the legal adoption of the child (if applicable). > If the period of 28 days mentioned above does not finish before the Date of Expiry. The definition of a Critical Illness in rule L6.1 applies to Children s Critical Illness Cover, except that, if the child is below age 16, the definition of Total Permanent Disability is that the child, as a result of an illness or injury, when he reaches age 16, will be totally and permanently unable to follow any employment or occupation for profit or reward. The claims procedure described in rule L6.4 will apply to Children s Critical Illness Cover. A claim under this rule will not bring the plan to an end. L7 Waiver of Premium Benefit L7.1 Waiver of Premium Benefit The schedule shows if Waiver of Premium Benefit applies to your plan and to which Life Assured or Lives Assured it applies. It also shows the length of the Deferred Period for Waiver of Premium Benefit (the Deferred Period ). If a Life Assured, to whom Waiver of Premium Benefit applies, has suffered and is suffering a period of incapacity (as defined in rule L7.2) longer than the Deferred Period, then we will waive premiums in respect of that part of the period which extends beyond the Deferred Period, that is, we will allow you not to pay premiums but will allow your plan to continue as if the premiums had been paid. In the remainder of rule L7 we provide details of how we will do this. If Waiver of Premium Benefit applies to two Lives Assured and they suffer a period of incapacity at the same time, the rules will apply as if only one was suffering that period. L7.2 Definitions of Incapacity In the rules relating to Waiver of Premium Benefit there are three definitions of incapacity. In each of these, the period of incapacity will come to an end if and when the Life Assured actually engages in any employment or occupation whatsoever for profit or reward irrespective of whether or not such employment or occupation is the Life Assured s own employment or occupation. The three definitions are as follows: Prudential Protection Rules 11

12 > the Standard Definition This only applies if the Special Definition does not apply and a Life Assured is engaged in a remunerative occupation immediately prior to the start of the period of incapacity. > the Special Definition This only applies if the schedule shows that it applies and a Life Assured is engaged in a remunerative occupation immediately prior to the start of the period of incapacity. > the Activities of Daily Living Definition This applies if a Life Assured is not engaged in a remunerative occupation immediately prior to the start of a period of incapacity. (a) Standard Definition of Incapacity If the Standard Definition of Incapacity applies then, when we say that a Life Assured is suffering a period of incapacity, we mean that, throughout the period, he is totally unable, as a result of an illness or injury, to engage for profit or reward in the occupation in which he was engaged immediately prior to the start of that illness or injury. (b) Special Definition of Incapacity If the Special Definition of Incapacity applies then, when we say that a Life Assured is suffering a period of incapacity, we mean that, throughout the period, he is totally unable, as a result of an 12 Prudential Protection Rules illness or injury, to engage in any employment or occupation whatsoever for profit or reward. (c) Activities of Daily Living Definition of Incapacity If the Activities of Daily Living Definition of Incapacity applies then, when we say that a Life Assured is suffering a period of incapacity, we mean confirmation by a Consultant Physician of the inability of the Life Assured to perform without the help of another person at least three of the following Activities of Daily Living. Activities of Daily Living are: (i) (ii) (iii) (iv) Continence the ability to manage bowel and bladder functions such that an adequate level of personal hygiene can be maintained. Dressing the ability to put on, take off, secure and unfasten all garments and, any braces, artificial limbs or other surgical appliances. Feeding the ability to feed oneself once food and drink have been prepared and made available. Mobility the ability to move from one room to another in the insured s normal place of residence. (v) (vi) Transferring the ability to move from a bed to an upright chair or wheelchair, and vice versa. Washing the ability to wash in the bath or shower (including getting into and out of the bath or shower) such that an adequate level of personal hygiene can be maintained. L7.3 Period of Waiver If we are satisfied that there has been a period of incapacity (as defined in rule L7.2), we will then calculate the period of waiver. This will be an exact number of months, regardless of whether premiums are paid yearly or monthly. It will be calculated as follows: > We will take one day in each month, namely the same day of the month as the Date of Currency. We call it the monthly anniversary. > We will calculate the number of monthly anniversaries in the Deferred Period. > We will exclude this number from the number of monthly anniversaries in the period of incapacity. > The number of monthly anniversaries, which have not been excluded, will define the period of waiver. > If a period of incapacity, which results in a premium being waived, is followed by a further period of incapacity, and no

13 more than two monthly anniversaries have come between these periods of incapacity, and if the periods of incapacity arise from the same illness or injury, we will call them linked periods of incapacity. In respect of linked periods of incapacity we will exclude only the number of monthly anniversaries in one Deferred Period. L7.4 Waiver of Premium and Payment of Premiums If premiums are payable monthly, and > a premium is due on a monthly anniversary within a period of waiver, and > all previous premiums have been paid or waived, then that premium need not be paid. If premiums are payable yearly, and > during the year, up to and including the premium due date of a yearly premium, there are monthly anniversaries which are within a period of waiver, and > all previous premiums have been paid or waived, then the number of these monthly anniversaries will be divided by 12 and that proportion of the yearly premium due on that premium due date need not be paid. The remainder of the yearly premium will be payable by you. If all 12 monthly anniversaries during the year up to and including the yearly premium due date are within a period of waiver, the entire yearly premium due on that premium due date need not be paid. L7.5 Non-Payment of Premiums No premium or part of a premium will be waived if any earlier premium or premiums are outstanding. No part of a yearly premium will be waived if the remaining part of the premium is outstanding. L7.6 Age Limit for Waiver Of Premium Benefit If Waiver of Premium Benefit applies to one Life Assured only, then it will end on the plan anniversary preceding the Life Assured s 60th birthday. No premium or part of a premium due on or after that date will be waived. However, if the plan anniversary preceding the Life Assured s 60th birthday falls within a period of waiver, premiums will continue to be waived until the earlier of: > the end of the period of waiver, and > the Life Assured s 60th birthday. If Waiver of Premium Benefit applies to two Lives Assured, then it will cease to apply to the older of the two Lives Assured on the plan anniversary preceding his 60th birthday. No further premium or part of a premium will be waived on account of that Life Assured s incapacity. Waiver of Premium Benefit will end entirely on the plan anniversary preceding the younger Life Assured s 60th birthday. However, if the plan anniversary preceding a Life Assured s 60th birthday falls within a period of waiver, premiums will continue to be waived until the earlier of: > the end of the period of waiver, and > that Life Assured s 60th birthday. L7.7 When Waiver Of Premium Benefit will not be paid No illness or injury will be accepted as giving rise to a period of incapacity and no Waiver of Premium Benefit will be available if the incapacity arises directly or indirectly, wholly or partly, from, or is made worse by, either of the following: > HIV/AIDS Infection with Human Immunodeficiency Virus (HIV) or conditions due to any Acquired Immune Deficiency Syndrome (AIDS) (as defined in rule L6.3). > Pregnancy Normal pregnancy or childbirth. Incapacity due to complications as a result of pregnancy or childbirth will not be excluded. Any diagnosis must be by a medical practitioner registered in the United Kingdom whose specialism is appropriate to the cause of the claim. The deferred period will start when the Life Assured becomes incapacitated. No premium or part of a premium will be waived on account of a monthly anniversary on which the Life Assured is resident outside the United Kingdom. Prudential Protection Rules 13

14 L7.8 How to Claim Waiver Of Premium Benefit If you wish to claim this benefit, you must tell us, in writing, that the Life Assured is suffering a period of incapacity (as defined in rule L7.2). You must tell us not later than two months before the end of the Deferred Period. If you do not tell us until after two months before the end of the Deferred Period, we may treat the Deferred Period as not ending until two months after the date you told us. If we ask you to do so, you must complete a claim form before premiums are first waived and at reasonable intervals thereafter while they are being waived. You must give us as much information as you can regarding the nature and duration of the incapacity. We may require the Life Assured to be examined by a doctor, whom we will name, and we may require the Life Assured to undergo tests which are necessary and reasonable in order to establish the nature of his condition.we will not be responsible for any expenses which are incurred in meeting the requirements of this rule (including travelling expenses to the place of examination by the doctor), except that any fees paid to the doctor for the examination, any fees paid to any doctor for any information requested directly by us and any fees paid in connection with tests requested by us will be met by us. If the Life Assured is outside the United Kingdom, we may require him to return to the United Kingdom for examination by a doctor or for any of the necessary tests. You must tell us immediately the Life Assured engages in his normal occupation or in any other employment or occupation for profit or reward. Before any payment is waived, we may require proof of the age of the Life Assured or Lives Assured (if not already produced). L8 Mortgage Payment Benefit L8.1 Mortgage Payment Benefit The schedule shows if Mortgage Payment Benefit applies to your plan and to which Life Assured or Lives Assured it applies. It also shows the amount of the benefit ( Amount of Mortgage Payment Benefit ) and the length of the Deferred Period for Mortgage Payment Benefit (the Deferred Period ). If a Life Assured, to whom Mortgage Payment Benefit applies, has suffered and is suffering a period of incapacity (as defined in rule L8.2) longer than the Deferred Period, then we will pay Mortgage Payment Benefit in respect of that part of the period which extends beyond the Deferred Period. In the remainder of rule L8 we provide details of how we will do this. If Mortgage Payment Benefit applies to two Lives Assured and they suffer a period of incapacity at the same time, the rules will apply separately to each Life Assured. If you have selected Unemployment Cover and both Mortgage Payment Benefit and Unemployment Cover (see the unemployment policy) are payable to the same Life Assured at the same time, the total benefit payable will be restricted to the higher of the two benefits. L8.2 Definitions of Incapacity In the rules relating to Mortgage Payment Benefit there are three definitions of incapacity. In each of these, the period of incapacity will come to an end if and when the Life Assured actually engages in any employment or occupation whatsoever for profit or reward irrespective of whether or not such employment or occupation is the Life Assured s own employment or occupation. The three definitions are as follows: > the Standard Definition This only applies if the Special Definition does not apply and a Life Assured is engaged in a remunerative occupation immediately prior to the start of the period of incapacity. > the Special Definition This only applies if the schedule shows that it applies, and a Life Assured is engaged in a remunerative occupation immediately prior to the start of the period of incapacity. > the Activities of Daily Living Definition This applies if a Life Assured is not engaged in a remunerative occupation immediately prior to the start of a period of incapacity. 14 Prudential Protection Rules

15 (a) Standard Definition of Incapacity If the Standard Definition of Incapacity applies then, when we say that a Life Assured is suffering a period of incapacity, we mean that, throughout the period, he is totally unable, as a result of an illness or injury, to engage for profit or reward in the occupation in which he was engaged immediately prior to the start of that illness or injury. (b) Special Definition of Incapacity If the Special Definition of Incapacity applies then, when we say that a Life Assured is suffering a period of incapacity, we mean that, throughout the period, he is totally unable, as a result of an illness or injury, to engage in any employment or occupation whatsoever for profit or reward. (c) Activities of Daily Living Definition of Incapacity If the Activities of Daily Living Definition of Incapacity applies then, when we say that a Life Assured is suffering a period of incapacity, we mean confirmation by a Consultant Physician of the inability of the Life Assured to perform without the help of another person at least three of the following Activities of Daily Living. The Activities of Daily Living are: (i) (ii) (iii) (iv) (v) (vi) Continence the ability to manage bowel and bladder functions such that an adequate level of personal hygiene can be maintained. Dressing the ability to put on, take off, secure and unfasten all garments and, any braces, artificial limbs or other surgical appliances. Feeding the ability to feed oneself once food and drink have been prepared and made available. Mobility the ability to move from one room to another in the insured s normal place of residence. Transferring the ability to move from a bed to an upright chair or wheelchair, and vice versa. Washing the ability to wash in the bath or shower (including getting into and out of the bath or shower) such that an adequate level of personal hygiene can be maintained. L8.3 Period of Mortgage Payment Benefit If we are satisfied that there has been a period of incapacity (as defined in rule L8.2), we will then calculate the Period of Mortgage Payment Benefit. This is calculated by excluding the Deferred Period from the period of incapacity. If a period of incapacity, in respect of which a monthly Mortgage Payment Benefit payment has been made, is followed by a further period of incapacity, and these periods are linked for the purposes of Waiver of Premium Benefit (see rule L7.3), then they are also linked for the purposes of Mortgage Payment Benefit. In respect of linked periods of incapacity we will exclude only one Deferred Period. L8.4 Calculation of Maximum Mortgage Payment Benefit We will first calculate the Eligible Pre-Incapacity Earnings, as follows: > Earnings are the total earned income of the Life Assured calculated as follows: (i) If the Life Assured is an employed person, Earnings from his employment are the gross earnings, as shown on the Certificate of Pay given to him by his employer (currently known as a P60 ). If a calculation of earnings is required for a period during which the employer has not provided a Certificate of Pay, we will calculate Earnings in the same way as they would be calculated for a Certificate of Pay. Prudential Protection Rules 15

16 (ii) If the Life Assured is engaged as a sole trader or a partner in any trade, profession or vocation, Earnings from that trade, profession or vocation are his personal earnings, as assessable for Income Tax. This is usually the net profit plus depreciation less capital allowances. > Pre-Incapacity Earnings are the average monthly earnings of the Life Assured in a period immediately before the start of the period of incapacity. Normally the average will be calculated over a 12 month period but, if we believe that the Life Assured s earnings are particularly liable to fluctuation, we may use a longer period of up to a maximum of three years. > If Pre-Incapacity Earnings are not more than 3,750 each month, we will multiply them by 50 and divide by 100. > If Pre-Incapacity Earnings are more than 3,750 each month, we will divide the amount over 3,750 by 3 and add 1,875. The result of these calculations will be the Eligible Pre-Incapacity Earnings. We will calculate the Maximum Mortgage Payment Benefit as the Eligible Pre-Incapacity Earnings less the total of the monthly equivalent of: > any income benefit (including the payment of mortgage interest from other sources) to which the Life Assured is entitled from any other insurance against incapacity resulting from injury or illness, and > any continuing salary, fees, wages or commission to which the Life Assured is entitled or any early retirement pension resulting from any office or employment or any trade, profession or vocation and paid as a result of his incapacity. At reasonable intervals during a Period of Mortgage Payment Benefit, we will recalculate the Maximum Mortgage Payment Benefit using the amounts of the benefits paid at the time. L8.5 Amount of Mortgage Payment Benefit Payments If the Standard or Special Definition of Incapacity applies, the amount of each monthly payment (other than the first and last payments) will be the lower of: > the Amount of Mortgage Payment Benefit shown on the schedule, and > the Maximum Mortgage Payment Benefit (see rule L8.4). If the Activities of Daily Living Definition of Incapacity applies, the amount of each monthly payment (other than the first and last payments) will be the Amount of Mortgage Payment Benefit shown on the schedule. L8.6 Payment of Mortgage Payment Benefit During a Period of Mortgage Payment Benefit we will pay you Mortgage Payment Benefit, subject to these rules. In particular: > we will pay Mortgage Payment Benefit monthly on the first day of each month. > the first payment will be due on the first day of the month after the end of the Deferred Period. > the final payment will be due on the first day of the month following the Mortgage Payment Benefit Termination Date. The Mortgage Payment Benefit Termination Date will be the earliest of: > the date on which the incapacity ceases, and > the plan anniversary preceding the Life Assured s 60th birthday, and > the coming to an end of the plan. The first and last payments will be fractions of the monthly amount. The amount of the first payment will be calculated as follows: > We will calculate the number of days between the end of the Deferred Period and the date of first payment. > We will multiply this number by 12 and divide by Prudential Protection Rules

17 > We will multiply the resulting figure by the amount of the monthly payment. We will calculate the amount of the last payment in the same way except that we use the number of days between the second last payment and the Mortgage Payment Benefit Termination Date. If the end of the Deferred Period and the Mortgage Payment Benefit Termination Date are within the same month, we will make only one payment, calculated as above, using the number of days between the end of the Deferred Period and the Mortgage Payment Benefit Termination Date. If, for whatever reason, not necessarily through your fault or that of the Life Assured, we make a payment in excess of that to which you are entitled, we may recover the amount of the excess from you. We will normally do this by deducting it from a future payment. L8.7 Proportionate Mortgage Payment Benefit If, following a period of incapacity in which monthly Mortgage Payment Benefit payments have been made, the Life Assured either: > starts an occupation different from his occupation immediately before the period of incapacity, and the new occupation is less remunerative than the former occupation, or > returns to his occupation immediately before the period of incapacity, but at a reduced level of activity and of remuneration, then Mortgage Payment Benefit, as described in rule L8, will not be available. However, provided that the Life Assured is unable as a result of the illness or injury to continue his former occupation at his former level of activity, we will pay Proportionate Mortgage Payment Benefit. The following conditions apply: > Proportionate Mortgage Payment Benefit is paid in the same manner as Mortgage Payment Benefit. > The amount of Proportionate Mortgage Payment Benefit is a proportion of the Mortgage Payment Benefit which would be payable if the Life Assured was suffering a period of incapacity. The proportion is the difference between the Life Assured s Pre-Incapacity Earnings and his current monthly earnings, divided by his Pre-Incapacity Earnings. > If the Life Assured returns to the occupation in which he was engaged immediately before the period of incapacity but at a reduced level of activity we may require the Life Assured to receive regular medical supervision or treatment, with a view to the eventual restoration of his former level of activity. L8.8 Age Limit for Mortgage Payment Benefit If Waiver of Premium Benefit ceases and the premium reduces because of the age of the Life Assured or Lives Assured (see rule L7.6), Mortgage Payment Benefit will also cease and the premium will further reduce. If Mortgage Payment Benefit applies to one Life Assured only, then it will end on the plan anniversary preceding the Life Assured s 60th birthday. However, if the plan anniversary preceding the Life Assured s 60th birthday falls within a Period of Mortgage Payment Benefit, Mortgage Payment Benefit will continue until the earlier of: > the end of the Period of Mortgage Payment Benefit, and > the Life Assured s 60th birthday. If Mortgage Payment Benefit applies to two Lives Assured, then it will cease to apply to the older of the two Lives Assured on the plan anniversary preceding his 60th birthday. Mortgage Payment Benefit will end entirely on the plan anniversary preceding the younger Life Assured s 60th birthday. However, if the plan anniversary preceding a Life Assured s 60th birthday falls within a Period of Mortgage Payment Benefit, Mortgage Payment Benefit will continue until the earlier of: > the end of the period of waiver, and > that Life Assured s 60th birthday. L8.9 When Mortgage Payment Benefit will not be paid No illness or injury will be accepted as giving rise to a period of incapacity and no Mortgage Payment Benefit will be paid if the incapacity arises Prudential Protection Rules 17

18 directly or indirectly, wholly or partly, from, or is made worse by, either of the following: > HIV/AIDS Infection with Human Immunodeficiency Virus (HIV) or conditions due to any Acquired Immune Deficiency Syndrome (AIDS) (as defined in rule L6.3). > Pregnancy Normal pregnancy or childbirth. Incapacity due to complications as a result of pregnancy or childbirth will not be excluded. Any diagnosis must be by a medical practitioner registered in the United Kingdom whose specialism is appropriate to the cause of the claim. The Deferred Period will start when the Life Assured becomes incapacitated. No Mortgage Payment Benefit will be paid on account of any period when the Life Assured is resident outside the United Kingdom. No Mortgage Payment Benefit will be paid if any premium or premiums are outstanding. L8.10 How to Claim Mortgage Payment Benefit Our requirements set out in rule L7.8 apply if you wish to claim Mortgage Payment Benefit. In addition, the following condition will apply: > We will require a copy of the Life Assured s Certificate of Pay (currently known as a P60 ) provided by his employer or, if the Life Assured is engaged as a sole 18 Prudential Protection Rules trader or partner in any trade, profession or vocation, a copy of the accounts (whether audited or not). We may require the Life Assured to obtain any further information from his employer, accountant or HM Revenue & Customs which is relevant to the claim. L9 Guaranteed Insurability Option L9.1 General Rule L9 describes how, in the circumstances set out below, you can increase the Life Cover, Basic Critical Illness Cover and Mortgage Payment Benefit. We will issue a new plan for the increase. If Waiver of Premium Benefit applies to this plan, it can also apply to the new plan. The Guaranteed Insurability Option will not be available in the new plan. At any time within three months of the happening of one of the three events listed below, and provided the Life Assured (or both Lives Assured) are below age 50, you may ask us to increase the benefits, subject to the conditions in rules L9.2 to L9.6 below. > Mortgage Increase The conditions are: (i) (ii) you are using your plan in connection with a mortgage or mortgages on the main residence of the Life Assured or (if there are two Lives Assured) of both Lives Assured, and the mortgage is increased or a new mortgage started, and (iii) any increase in the total amount of the mortgage or mortgages is being made solely in order to provide funds for either the purchase of a new main residence or the improvement of the existing main residence. > Childbirth or adoption The birth of a child (or children) to, or the legal adoption of a child (or children) by, the Life Assured or, if there are two Lives Assured named on the Schedule, both Lives Assured. > Marriage The marriage of the Life Assured (excluding his remarriage to a former spouse) or, if two Lives Assured are named on the Schedule, the marriage of the Lives Assured to each other (but excluding their re-marriage). The option will not be available during a period of incapacity (as defined in rules L7.2 or L8.2). If you wish to exercise the Option, you must provide us, at your own expense, with such evidence as is required to demonstrate to us that the event has taken place. Further conditions of the option are given in L9.2 to L9.6 below. L9.2 Mortgage Increase > You may increase the Life Cover and, if it is a benefit in this plan, the Basic Critical Illness Cover. > You may include Waiver of Premium Benefit on a Life Assured in the new plan if this is a benefit in this plan.

19 > You may increase the amount of Mortgage Payment Benefit on a Life Assured if this is a benefit in this plan. > The increase in Life Cover or Basic Critical Illness Cover can be no greater than the lower of: (a) the increase in the mortgage amount, and (b) 150,000 less the total amounts of Life Cover or Basic Critical Illness Cover of all new plans issued on the life of the Life Assured or of either or both of the Lives Assured as a result of a Guaranteed Insurability Option. > Increases are subject to our overall maximum cover limits at the time of exercising this option. > The monthly amount of Mortgage Payment Benefit in the new plan can be no greater than 1% of the increase in the mortgage loan. L9.3 Childbirth or adoption > You may increase the Life Cover and, if it is a benefit in this plan, the Basic Critical Illness Cover. > You may include Waiver of Premium Benefit on a Life Assured in the new plan if this is a benefit in this plan. > The increase in Life Cover or Basic Critical Illness Cover can be no greater than the lower of: (a) 50% of the initial level of cover, and (b) 150,000 less the total amounts of Life Cover or Basic Critical Illness Cover of all new plans issued on the life of the Life Assured or of either or both of the Lives Assured as a result of a Guaranteed Insurability Option. > Increases are subject to our overall maximum cover limits at the time of exercising this option. > This part of the option can only be exercised twice. L9.4 Marriage > You may increase the Life Cover and, if it is a benefit in this plan, the Basic Critical Illness Cover. > You may include Waiver of Premium Benefit on a Life Assured in the new plan if this is a benefit in this plan. > The increase in Life Cover or Basic Critical Illness Cover can be no greater than the lower of: (a) 50% of the initial level of cover, and (b) 150,000 less the total amounts of Life Cover or Basic Critical Illness Cover of all new plans issued on the life of the Life Assured or of either or both of the Lives Assured as a result of a Guaranteed Insurability Option. > Increases are subject to our overall maximum cover limits at the time of exercising this option. > This part of the option can only be exercised once. L9.5 Further Conditions of the Option The following further conditions apply to the Guaranteed Insurability Option: > The term of the new plan will not exceed the remaining term of this plan. > The new plan will be issued according to terms and conditions applicable at the time. > The option will only be available if we have published rates of premium for new Prudential Protection plans. > The new plan must satisfy our minimum premium, maximum cover limits, term and benefit requirements at that time. > The premium for the new plan will be calculated on our normal premium rates appropriate to the age, sex, occupation and smoking habits of the Life Assured or Lives Assured at the time. > The new plan will not have a Guaranteed Insurability Option. > If Waiver of Premium Benefit or Mortgage Payment Benefit is included in the new plan as a result of the Guaranteed Insurability Option, no period of incapacity will start during the six months following the Date of Currency of this new plan. If a Life Assured, to whom Waiver of Premium Benefit or Mortgage Payment Benefit applies, suffers an Prudential Protection Rules 19

20 injury or illness during this six month period and still satisfies the relevant definition of incapacity at the end of the period, the period of incapacity will be considered to start at the end of the six month period. > If Critical Illness Cover is included in the new plan as a result of the Guaranteed Insurability Option and a Life Assured suffers a Critical Illness, Critical Illness Cover will not be available if the Critical Illness is a result, in any way, of a medical condition affecting the Life Assured, whether or not a diagnosis was made or any symptoms were evident, which: (a) existed at a date earlier than six months after the Date of Currency of the new plan, and (b) did not exist before the Date of Currency of your original plan. Critical Illness Cover will be available if the medical condition is the direct result of an injury after the Date of Currency of the new plan. L9.6 No Evidence of Insurability Provided that the conditions of rule L9 are met, the Guaranteed Insurability Option will be available regardless of the health of the Life Assured or of the Lives Assured or of any other factor which would normally have made us wish not to cover him or them for Life Cover and, if these benefits are included in this plan, L10 Critical Illness Cover, Waiver of Premium Benefit or Mortgage Payment Benefit. General L10.1 Entitlement We will make the payments described in this plan to you if you are the person who is entitled to them. If the ownership of a plan has changed, we will make payment to whoever is entitled to the plan. When the rules and schedule refer to you, this should be read as including anyone else who is entitled to the benefits. L10.2 Settlement of Claim Before the settlement of any claim (see rule L2) we will require you to return the schedule to us, The Prudential Assurance Company Limited, at Stirling, FK9 4UE. Before paying any benefit on death, we will require proof of death and will require proof (if not already produced) of the age of the Life Assured (or of the ages of both Lives Assured if there are two Lives Assured named on the schedule). Our requirements before settling any Critical Illness Cover, Waiver of Premium Benefit, Mortgage Payment Benefit or Unemployment Cover claim are set out in the rule describing the benefit. L10.3 Mis-statement of Age If the age of the Life Assured or of either of the Lives Assured has been mis-stated on the application, the terms of the plan will be amended in a way which is considered by the Company to be just and reasonable. L10.4 Cancellation Rights We will apply the cancellation rights as contained in the Financial Services Authority Conduct of Business Sourcebook, as amended from time to time, whether or not these apply to the plan. We will apply them to the plan as a whole and not to the life policy and unemployment policy separately. L10.5 Law of Policies The life policy is governed by the law of England. The unemployment policy with St Andrew s Insurance plc is governed by the law of England. L10.6 Notice of assignation or assignment You must send written notice of any assignation or assignment in relation to the life policy, or of any other document which changes the person who is entitled to the life policy, to The Prudential Assurance Company Limited at Stirling, FK9 4UE. Until we receive notice, the change of entitlement will not take effect. L11 Customer Complaints Any enquiry or complaint regarding this Policy should in the first instance be addressed to your Financial Adviser. If you have dealt directly with us, please contact us at: Prudential Stirling, FK9 4UE Telephone No: Please supply details of your policy number to enable the enquiry to be dealt with promptly. 20 Prudential Protection Rules

21 You can refer your complaint to the Financial Ombudsman Service if you are not satisfied with the outcome of your complaint or the delay in resolving it. The Financial Ombudsman Service is at: South Quay Plaza 183 Marsh Wall London, E14 9SR Telephone No: Although your contract is with St Andrew s Insurance plc and the rules are written as if St Andrew s Insurance plc were operating your policy, Prudential Distribution Limited, who administer the business of The Prudential Assurance Company Limited, will also provide administration services in respect of the unemployment policy on behalf of St Andrew s Insurance plc. > Full Time Employment Working for at least 16 hours a week, under a contract of employment. The Life Assured must be receiving a salary or wages and be paying the appropriate National Insurance contributions. > Plan Anniversary Any anniversary of the Date of Currency. Your legal rights will not be affected if you make a complaint. To ensure we can constantly improve our service to customers, we may record or monitor telephone conversations with you for staff training purposes. The Unemployment Policy U1 Introduction The schedule shows if Unemployment Cover applies to your plan and to which Life Assured or Lives Assured it applies. If you have selected Unemployment Cover, the unemployment policy rules and the schedule with them confirm you have a contract with St Andrew s Insurance plc. These rules are written in such a way that they read correctly if you, the Planholder or Planholders, are not the Life Assured or Lives Assured, but for many plans you will also be the Life Assured or Lives Assured. These rules are written using masculine words such as he or his. When the person to whom they refer is female, the feminine word, such as she or her, should be substituted. U2 General Definitions In the unemployment policy rules, the following definitions will apply: > Contract Workers Working for at least 16 hours a week, under a fixed term contract of employment. The Life Assured must be receiving a salary or wages and be paying the appropriate National Insurance contributions. Contract workers will be regarded as being in full time employment if: (i) The Life Assured is on a yearly contract which has been renewed at least once; or (ii) The Life Assured has been under a contract with the same employer for a period of at least 24 months. > Deferred Period The initial number of consecutive weeks of a period of unemployment during which no Unemployment Cover will be payable. The Deferred Period you have selected is stated on the schedule. > Premium The total premium of the plan. > Self Employed/ Self Employment Working for at least 16 hours a week for profit in a profession or business, either alone or with others. The Life Assured must be paying the appropriate National Insurance contributions and be liable to pay Income Tax under schedule D. > United Kingdom/UK Great Britain and Northern Ireland. > Waiting Period This is the period during which Unemployment Cover is not available. It is: 30 days from the start of the plan if you have taken out this plan to cover a new mortgage, or 90 days from the start of the plan if you have taken out this plan to cover an existing mortgage or the plan is not required to cover a mortgage, or 90 days from the date cover is reinstated if your Unemployment Cover has lapsed. Prudential Protection Rules 21

22 U3 U4 > Work/Worked/Working Full time employment, self employment or contract work. Definitions of Unemployment/ Unemployed The Life Assured should be registered as unemployed at an Unemployment Benefit Office or Job Centre and be available for and actively looking for employment. If the Life Assured is a contract worker, the Life Assured s contract must have been terminated earlier than the planned termination date unless the Life Assured is regarded as being in full time employment, when unemployment means the non-renewal of a contract. If the Life Assured is self employed, the Life Assured must have ceased trading because his business is financially not viable and notified HM Revenue & Customs of that fact. The Life Assured cannot be receiving any form of payment or be helping, managing or carrying on any part of the day to day running of the business while the Life Assured is unemployed. Premiums The premium for the Unemployment Cover is payable with the premium for the life policy. Your premium for Unemployment Cover may change as a result of a change in Insurance Premium Tax or a change in the cost of providing Unemployment Cover. If there is a change in Insurance Premium Tax, we will give you 30 days notice before the premium for Unemployment Cover changes. If your premium for Unemployment Cover increases as a result of a change in the cost of providing this cover, we will give you at least 30 days written notice and will provide you with the following options: i) the right to pay the higher premium while retaining the existing level of cover; ii) the right to cancel the Unemployment Cover without penalty. If you do not respond informing us of your choice, by the start date on which the revised premium is to come into effect, we will assume that you wish to keep the same level of cover at a revised cost, and we will change the premium accordingly. Premiums for the Unemployment Cover on a Life Assured will stop on the plan anniversary preceding that Life Assured s 65th birthday. Otherwise, the conditions of payment are set out in rule L3 and the consequences of not paying a premium, or of paying it late, are set out in rule L4. In particular, if your Unemployment Cover lapses you must confirm that the Life Assured or Lives Assured meet the eligibility criteria for Unemployment Cover applicable at that time, and there will be a 90 day waiting period from the date of reinstatement before Unemployment Cover will be available. U5 U6 Surrender Value If you cancel the Unemployment Cover, the unemployment policy does not have a cash value. You are not able to cancel the Unemployment Cover without also cancelling the whole plan except under the terms relating to cancellation rights contained within rule U4. Unemployment Cover If Unemployment Cover applies to your plan, the schedule shows the amount of the Unemployment Cover ( Amount of Unemployment Cover ) and the length of the Deferred Period for Unemployment Cover (the Deferred Period ). If a Life Assured, to whom Unemployment Cover applies, has suffered and is suffering a period of unemployment (as defined in rule U3) longer than the Deferred Period, then St Andrew s Insurance plc will pay Unemployment Cover in respect of that part of the period which extends beyond the Deferred Period. However, St Andrew s Insurance plc will not pay Unemployment Cover if the period of unemployment starts during the Waiting Period or if you have received verbal or written notification of unemployment during the Waiting Period. If Unemployment Cover applies to two Lives Assured and they suffer a period of unemployment at the same time, the rules will apply separately to each Life Assured. If Unemployment Cover and Mortgage Payment Benefit (see 22 Prudential Protection Rules

23 U7 U8 rule L8) are both payable to the same Life Assured at the same time, the total benefit payable will be restricted to the higher of the two benefits. Period of Unemployment Cover If St Andrew s Insurance plc is satisfied that there has been a period of unemployment (as defined in rule U3), St Andrew s Insurance plc will then calculate the Period of Unemployment Cover. This is calculated by excluding the Deferred Period from the period of unemployment. If two periods of unemployment are separated by less than three months of continuous full time employment or self employment, they will be treated as one period of unemployment for the purposes of calculating your benefit. St Andrew s Insurance plc will exclude only one Deferred Period. The maximum of 12 monthly Unemployment Cover payments applies to the original and the later claims together, after which you can only claim for unemployment once the Life Assured has returned to continuous full time employment for at least three months or six months if self employed. Calculation of Maximum Unemployment Cover St Andrew s Insurance plc will first calculate the Eligible Pre-Unemployment Earnings, as follows: > Earnings are the total earned income of the Life Assured calculated as follows: (i) If the Life Assured was an employed person, Earnings from his employment are the gross earnings, as shown on the Certificate of Pay given to him by his employer (currently known as a P60 ). If a calculation of Earnings is required for a period during which the employer has not provided a Certificate of Pay, St Andrew s Insurance plc will calculate Earnings in the same way as they would be calculated for a Certificate of Pay. (ii) If the Life Assured was engaged as a sole trader or a partner in any trade, profession or vocation, Earnings from that trade, profession or vocation are his personal earnings, as assessable for Income Tax. This is usually the net profit plus depreciation less capital allowances. > Pre-Unemployment Earnings are the average monthly earnings of the Life Assured in a period immediately before the start of the period of unemployment. Normally the average will be calculated over a 12 month period but, if St Andrew s Insurance plc believes that the Life Assured s earnings were particularly liable to fluctuation, St Andrew s Insurance plc may use a longer period of up to a maximum of three years. > If Pre-Unemployment Earnings are not more than 3,750 each month, St Andrew s Insurance plc will multiply them by 50 and divide by 100. > If Pre-Unemployment Earnings are more than 3,750 each month, St Andrew s Insurance plc will divide the amount over 3,750 by 3 and add 1,875. The result of these calculations will be the Eligible Pre- Unemployment Earnings. St Andrew s Insurance plc will calculate the Maximum Unemployment Cover as the Eligible Pre-Unemployment Earnings less the total of the monthly equivalent of: > any income benefit (including the payment of mortgage interest from other sources) to which the Life Assured is entitled from any other insurance against unemployment, and > any continuing salary, fees, wages or commission to which the Life Assured is entitled or any early retirement pension resulting from any office or employment or any trade, profession or vocation and paid as a result of his unemployment. At reasonable intervals during a Period of Unemployment Cover, St Andrew s Insurance plc will recalculate the Maximum Unemployment Cover using the amounts of the benefits paid at the time. Prudential Protection Rules 23

24 U9 Amount of Unemployment Cover Payments The amount of each monthly payment (other than the first and last payments) will be the lower of: > the Amount of Unemployment Cover shown on the schedule, and > the Maximum Unemployment Cover (see rule U8). U10 Payment of Unemployment Cover During a Period of Unemployment St Andrew s Insurance plc will pay you Unemployment Cover, subject to these rules. In particular: > St Andrew s Insurance plc will pay Unemployment Cover monthly on the first day of each month. > the first payment will be due on the first day of the month after the end of the Deferred Period. > the final payment will be due on the first day of the month following the Unemployment Cover Termination Date. The Unemployment Cover Termination Date will be the earliest of: > the date on which the unemployment ceases, > payment of the 12th monthly Unemployment Cover payment, > the plan anniversary preceding the Life Assured s 65th birthday, and > the coming to an end of the plan. 24 Prudential Protection Rules The first and last payments will be fractions of the monthly amount. The amount of the first payment will be calculated as follows: > St Andrew s Insurance plc will calculate the number of days between the end of the Deferred Period and the date of first payment. > St Andrew s Insurance plc will multiply this number by 12 and divide by 365. > St Andrew s Insurance plc will multiply the resulting figure by the amount of the monthly payment. St Andrew s Insurance plc will calculate the amount of the last payment in the same way except that St Andrew s Insurance plc will use the number of days between the second last payment and the Unemployment Cover Termination Date. If the end of the Deferred Period and the Unemployment Cover Termination Date are within the same month, St Andrew s Insurance plc will make only one payment, calculated as above, using the number of days between the end of the Deferred Period and the Unemployment Cover Termination Date. If, for whatever reason, not necessarily through your fault or that of the Life Assured, St Andrew s Insurance plc makes a payment in excess of that to which you are entitled, St Andrew s Insurance plc may recover the amount of the excess from you. St Andrew s Insurance plc will normally do this by deducting it from a future payment. U11 Maximum Amount of Unemployment Cover The maximum amount that St Andrew s Insurance plc will pay for any one claim is 12 months benefit in respect of unemployment. After St Andrew s Insurance plc has paid the maximum benefit of 12 monthly payments you will not be able to make another unemployment claim until the Life Assured has returned to continuous full time employment for at least a further three months if the Life Assured is employed or six months if the Life Assured is self employed. U12 Maximum Amount of Unemployment Cover Contract Workers If the Life Assured is a contract worker, Unemployment Cover is only payable for the period between the actual termination date of the contract and the planned termination date of the contract unless: > the Life Assured is employed on a yearly contract which has been renewed at least once; or > the Life Assured has been under a contract with the same employer for a period of at least 24 months. U13 Maximum Amount of Unemployment Cover Temporary Employment If the Life Assured is receiving monthly benefit for unemployment and is offered temporary employment, then St Andrew s Insurance plc will not pay you Unemployment Cover while the

25 Life Assured is employed but St Andrew s Insurance plc will resume payments as a continuation of the first claim when the Life Assured becomes unemployed again provided: > You have told St Andrew s Insurance plc in advance that the Life Assured will be employed and have given St Andrew s Insurance plc details of the Life Assured s employer (or have told St Andrew s Insurance plc the Life Assured is self employed) and for how long the Life Assured will be employed. You must tell St Andrew s Insurance plc of any changes to this. > The Life Assured s temporary employment lasts for at least one week and no longer than six months, whether for one contract or a series of contracts. > The Life Assured does not have more than three periods of temporary employment during a single claim. > You keep to all the conditions of the unemployment policy. The maximum of 12 monthly Unemployment Cover payments applies to the original and later claims together, after which you can only claim for unemployment once the Life Assured has returned to continuous full time employment for at least three months if he is employed or six months if he is self employed. U14 Periods of Unemployment Cover and Waiver of Premiums In this rule monthly due date will mean a day which is the same day of the month as the Date of Currency. If the Date of Currency is the 29th, 30th or 31st day of a month, the monthly due date will be taken as the 28th day of the month. Premiums payable under the plan will be waived during a Period of Unemployment Cover subject to the conditions below. > Any monthly premium due to be paid within a Period of Unemployment Cover will be waived. > If a yearly premium is due to be paid within a Period of Unemployment Cover, it will be waived. However, if the Period of Unemployment Cover ceases within one year of the due date of this premium, a proportion of that yearly premium will be due to be paid at the end of the Period of Unemployment Cover. The proportion will be calculated as the number of monthly due dates between the end of the Period of Unemployment Cover and the next policy anniversary, divided by 12. > If a yearly premium was due to be paid in the year before the start of Period of Unemployment Cover, a proportion of it will be refunded. The proportion will be the number of monthly due dates between the start of the Period of Unemployment Cover and the next policy anniversary, divided by 12. > The refund will be made at the end of the Period of Unemployment Cover and will be adjusted by any balance of premiums due prior to the start of the Period of Unemployment Cover which has not been deducted from the Unemployment Cover. U15 Age Limit for Unemployment Cover If Unemployment Cover applies to one Life Assured only, then it will end on the plan anniversary preceding the Life Assured s 65th birthday. However, if the plan anniversary preceding the Life Assured s 65th birthday falls within a Period of Unemployment Cover, Unemployment Cover will continue to be paid until the earlier of: > the end of the Period of Unemployment Cover, and > the Life Assured s 65th birthday, subject to the rules in this chapter. If Unemployment Cover applies to two Lives Assured, then it will cease to apply to the older of the two Lives Assured on the plan anniversary preceding his 65th birthday. Unemployment Cover will end entirely on the plan anniversary preceding the younger Life Assured s 65th birthday. Prudential Protection Rules 25

26 However, if the plan anniversary preceding a Life Assured s 65th birthday falls within a Period of Unemployment Cover, Unemployment Cover will continue to be paid until the earlier of: > the end of the Period of Unemployment Cover, and > that Life Assured s 65th birthday, subject to the rules in this chapter. U16 When Unemployment Cover will not be paid No Unemployment Cover will be paid for unemployment of a Life Assured directly or indirectly caused by, contributed to by, or arising from any of the following: > Which is a normal seasonal feature of the Life Assured s occupation. > Which was known to be impending or you or the Life Assured had reason to believe was likely to happen when you completed the application form. > After the end of a fixed term contract unless: 1. the Life Assured is employed on a yearly contract which has been renewed at least once; or 2. the Life Assured has been under contract with the same employer for a continuous period of at least 24 months. > After the end of a period of training or apprenticeship. 26 Prudential Protection Rules > Which is voluntary, including voluntary redundancy. > Resulting from the Life Assured s gross misconduct. > Resulting from the Life Assured s fraud or dishonesty. > Resulting from strike or lock out. > For any period during which the Life Assured receives payment in lieu of notice. > Ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel. > The radioactive, toxic, explosive or other hazardous properties of any nuclear assembly or nuclear component of it. > War, invasion, act of foreign enemy, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military force or coup. No Unemployment Cover will be paid for unemployment of a Life Assured: > If any premium or premiums are outstanding. > If the period of unemployment starts, or notification of unemployment is received, during the Waiting Period (see rules U2 and U6). > If the Life Assured stops working or his hours fall below 16 hours each week. Unemployment Cover will not be available until the Life Assured returns to full employment. Unemployment policy premiums will continue to be payable during this period. > If the Life Assured has changed his employment status and has not been continuously employed or self employed during the six month period before the start of the current period of unemployment. > If wholly or partly resulting from wilful self-inflicted injuries or in consequence of the Life Assured being under the influence of alcohol or drugs other than under the direction of a qualified medical practitioner but not for the treatment of drug addiction. > If arising from backache and related conditions unless there is radiological medical evidence of the condition resulting in disability. > If arising from any psychiatric illness, mental or nervous disorder including stress or stress related conditions unless investigated and diagnosed by a qualified medical practitioner. U17 How to Claim Unemployment Cover You must: Write and tell St Andrew s Insurance plc as soon as possible of any claim. This should be no later than 90 days after the Life Assured s unemployment arises. > Obtain at your own expense proof of unemployment and any other information St

27 Andrew s Insurance plc may require as proof of the Life Assured s continuing eligibility for Unemployment Cover. These could be a letter from the Life Assured s previous employer, bank, Job Centre or HM Revenue & Customs. > If the Life Assured is self employed, you will need to provide St Andrew s Insurance plc with evidence at your own expense that the Life Assured s business is not financially viable and that unemployment is not seasonal or predictable in the Life Assured s line of work. U18 Geographical limits/ moving abroad When this insurance starts you must live and be working within the United Kingdom. If subsequently your job location moves outside the United Kingdom, the Unemployment Cover will remain valid provided: > the Life Assured is working for the British Armed Forces or as a civil servant in a British embassy or consulate; or > the Life Assured is working for an employer that is a United Kingdom registered company who assigns the Life Assured to work within the European Union. Claim validation must be carried out by an appropriate employment office situated in the United Kingdom. U19 Cancellation of Unemployment Cover Unemployment Cover on a Life Assured will automatically be cancelled upon the earliest of the following events: > If the Life Assured s working hours fall below 16 per week. > The date on which the Life Assured starts to receive a state pension or he retires whether or not he receives a pension. > The Life Assured s death. > Cancellation of the life policy in the plan. St Andrew s Insurance plc may cancel Unemployment Cover by giving you written notice to the address shown on the files of The Prudential Assurance Company Limited. You will receive at least 30 days notice of cancellation if an alternative policy is offered or at least 90 days notice if no alternative is offered. U20 Fraud If you make a fraudulent claim your insurance cover will end immediately. You will not receive any further Unemployment Cover and no more premiums will be collected. You will have to return any Unemployment Cover paid. U21 General The provisions of rule L10 will apply to the unemployment policy. U22 Customer Complaints Any enquiry or complaint regarding this Unemployment Policy should in the first instance be addressed to: Prudential Stirling, FK9 4UE Telephone No: Please supply details of your policy number to enable the enquiry to be dealt with promptly. You can refer your complaint to the Financial Ombudsman Service if you are not satisfied with the outcome of your complaint or the delay in resolving it. The Financial Ombudsman Service is at: South Quay Plaza 183 Marsh Wall London, E14 9SR Telephone No: Your legal rights will not be affected if you make a complaint. To ensure we can constantly improve our service to customers, we may record or monitor telephone conversations with you for staff training purposes. U23 St Andrew s Insurance Plc Unemployment Cover is underwritten by St Andrew's Insurance plc, registered office: St Andrew's House, Portsmouth Road, Esher KT10 9SA (Registered No ). St Andrew's Insurance plc is authorised and regulated by the Financial Services Authority. Register number Prudential Protection Rules 27

28 "Prudential" is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including life assurance, pensions, savings and investment products. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number Authorised and regulated by the Financial Services Authority. W872 12/2008