For advisers only Friends Life Protect+ Income Protection. Income Protection cover. It s income protection. And more.

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1 For advisers only Friends Life Protect+ Income Protection Income Protection cover It s income protection. And more.

2 It s income protection. And... 2

3 it addresses a vital need it provides a regular income when ill health or injury stops people earning it provides more than a financial benefit it provides certain guarantees it offers a range of health services and benefits it provides a range of additional benefits it s adaptable to your client s circumstances it offers more than the State can provide 3

4 It addresses a vital need Most people are happy to insure their home, cars, valuable belongings and even their pets. But they often forget to insure the thing that pays for everything - their income. Yet 32% of all households have no savings 1, putting them at considerable risk if illness, unemployment or an emergency should hit. The facts: Each year: 140 million working days are lost to sickness absence2 ; and over 300,000 people fall out of work onto health-related state benefits. Before reaching this point, many have been long-term sick off work. So, is there a need for income protection? We think there is 1 DWP June DWP Nov

5 It provides a regular income when ill health or injury stops people earning Friends Life Protect+ Income Protection Cover provides insurance if someone loses their ability to earn a living because they can t work due to ill health or an accident. We believe that we offer a comprehensive policy and it s also available to the self-employed as well as those in employment. The maximum benefits that will be paid will be based on pre-incapacity gross income as follows: 65 percent of the first 10,000 a year plus 55 percent of earnings over 10,000 a year We will deduct any continuing benefits and earnings your client is receiving from the benefit calculated above, but will not deduct any state benefits. The choice of terms is highly flexible. Your client can take out a policy if they are aged between 18 and 59 and they can hold it until retirement, which can be 50, 55, 60, 65, or 70. Or they can choose any fixed term from 5 to 52 years, subject to their age and term of cover. 5

6 It provides more than a financial benefit We ve made a significant investment in the provision of additional services such as Bupa HealthLine and Best Doctors to help your client with health questions or concerns. Bupa HealthLine and Best Doctors are non-contractual benefits that may be withdrawn at any time and without notice. Bupa HealthLine is provided by or through subsidiary companies of the Bupa Group. We offer an own occupation definition for a wide range of occupations, including doctors, dentists and vets to provide greater certainty at the point of claim. We also provide proportionate and rehabilitation benefit. Your client could benefit from proportionate benefit if they return to another occupation but for lower income as a result of their illness or injury. NHS Doctors Sick Pay Initiative After five years, NHS doctors are entitled to the maximum sick pay allowance of six months full pay followed by six months of half pay. However, for newly qualified doctors who haven t accrued years of service, or doctors returning to the NHS after a sabbatical, their sick pay entitlement will be less. Our income protection cover features the NHS Doctors Sick Pay Initiative for doctors employed by the NHS. Regardless of how long they have been working for the NHS, if they are unable to work due to sickness or injury, it provides a replacement income as soon as their NHS full sick pay ends. Terms and conditions apply. Alternatively, the rehabilitation benefit would be paid, for a maximum of one year, where a client initially returns to work part time as part of a graduated return to work program. Terms and conditions apply. BEST DOCTORS is a registered trademark. Used with permission. 6

7 It provides certain guarantees Guaranteed benefits We can guarantee certain levels of income. Please see the next page for examples. If your client finds their income reduced for some reason after taking out the cover, it doesn t mean their benefit will always be reduced. We will waive your client s premium three months from the date their incapacity started, unless their deferred period is one month then we will waive their premium one month from the date their incapacity started. If the deferred period is two months then we will waive the premium after two months. Waiver of premiums To allow for your client s different circumstances, we believe in providing choices. We have a range of deferred periods; 1, 2, 3, 6, 12 or 24 months. However, we can guarantee that we won t ask your client to pay their premium for longer than three months if they are incapacitated. 7

8 So, how do the guaranteed benefits work? Example one Your client earns 27,500 a year, applies and is eligible for the maximum available annual benefit of 16,125 a year. Your client puts in a valid claim at a later date when they are earning less. Let s say, 24,000 - which would equate to an annual benefit of 14,200. We will pay an annual benefit of 15,600 (the maximum guaranteed benefit payable) until the policy expires or the client returns to work, provided that there is no change in continuing earnings and benefits. Example two A client earns 36,000 a year, applies and is eligible for the maximum available benefit of 20,800 a year. Your client puts in a valid claim due to ill health but is now earning less. Let s say 34,000 a year, which equates to an annual benefit of 19,700 a year. We will pay an annual benefit of 20,800 for the first 12 months, reducing to 19,700 a year until the policy expires or the client returns to work, provided that there is no change in continuing earnings and benefits. The higher payments (in this example, 20,800) is only available if, at the point of the claim the difference between the benefit bought and the benefit allowed is less than 10 percent. 8

9 It offers a range of health services and benefits Your clients health and wellbeing are important to us and we aim to treat them as individuals and with empathy. With Friends Life Protect+ Income Protection, your clients may have access to a range of health services and benefits. Bupa HealthLine Bupa HealthLine is a team of skilled and experienced nurses, with a wide variety of specialist backgrounds and qualifications and with a wealth of up-to-date health information at their fingertips. Your clients can speak to a fully qualified Bupa nurse about any type of health query, day or night, on any day of the year. Bupa HealthLine is not just for your clients, their partner and children have access to exactly the same service. Best Doctors Best Doctors provide access to a service that is there for your clients and their family whenever needed. 1 Best Doctors is a network of over 53,000 leading medical experts who can give peace of mind that they have the right information to make important medical decisions with confidence. They offer an expert second medical opinion service from one of the best experts around the world, giving confirmation of diagnosis and the recommended course of treatment. 1 Best Doctors can be accessed by your clients, their partner and children up to the age of 18, or 23 if in full time education. Hospital in-patient benefit If your client is hospitalised through injury or illness for 6 nights or more we will pay up to 200 a night for up to 90 nights they spend in hospital. Terms and conditions apply. Therapy Benefit Therapy Benefit will be able to provide your client with financial support, of up to 100 per policy year, for a range of complementary therapy treatments including acupuncture, chiropractic, homeopathy, osteopathy and physiotherapy. Therapy Benefit is a non contractual benefit that may be withdrawn at any time and without notice. Fracture cover If your client suffers one of 18 specified fractures, we will pay a lump sum of up to 2,100. Fracture cover is an extra option which is available at an additional cost. Bupa HealthLine and Best Doctors are non-contractual benefits that may be withdrawn at any time and without notice. Bupa HealthLine is provided by or through subsidiary companies of the Bupa Group. 9

10 It provides a range of additional benefits The following benefits are automatically included: Career Break If your client ceases remunerated work at any time during the term of their membership, they can exercise one of the two career break options: either a lowered premium and benefits or fixed premiums and gross annual income considered to remain the same if your client becomes incapacitated during a work sponsored career break. Child-carer Benefit We will pay up to 25,000 if your client s child is diagnosed with one of the specified illnesses or conditions. This could help your client feel financially secure if they need to stop work to care for their child. See the Membership Handbook for the list of illnesses and conditions covered. Trauma Benefit Your client will receive Trauma Benefit if traumatic injury results in paralysis of the limbs, loss of sight, hearing, speech, hands or feet, or physical independence. 10 Houseperson s Benefit We offer houseperson s benefit which may pay up to 15,600 a year if your client does not work, or works less than 16 hours a week when the claim is made. Your clients can choose to add the following additional options to their income protection cover: Indexation We will increase your client s benefit on their policy anniversary. The amount the benefit increases by will depend on the indexation option they select at the application stage. The yearly increase levels they can choose from are: Retail Prices Index (RPI), Average Weekly Earnings (AWE), or by set levels of three percent or five percent. Indexation will result in an increased premium when the benefit increases. Limited Benefit Period This option enables your client to choose to receive benefits for a maximum of two years as a single continuous period or a series of shorter periods totalling 24 months (it is a lower cost option that your client may be able to transfer to a membership without a limited benefit option). Terms and conditions apply.

11 It s adaptable to your client s circumstances Your client can increase their cover up to three times throughout the life of the policy. They may want to increase it for a variety of reasons; they may have married or become a civil partner divorced or separated obtained a dissolution of a civil partnership had a child (including adopting a child or becoming a legal guardian) increased their mortgage due to moving house or undertaking home improvements been promoted by their current employer or started a new job with a different employer and their salary increases. In any of these situations, your client may write and ask us to change their policy. They have the option to make these types of changes to their membership with an increase in their benefit up to a maximum of 9,000 a year. Terms and conditions apply. 11

12 The policy that offers more than the State can provide If your client is too ill to work through injury, illness or disability they may be entitled to support from the State. This could include Employment and Support Allowance. How much will your client receive on this allowance and how much do they need? The budget planner on the next page is designed to help you and your client understand their monthly outgoings. Over the next few pages, we have outlined how Employment and Support Allowance works. 12

13 Monthly outgoings Completing a budget planner can help paint your client s financial picture. Monthly outgoings Cost Mortgage repayments / rent Home insurance Council tax Loans / credit cards Gas Electricity Water Telephone / mobile / internet Supermarket bills Life assurance Property maintenance Pension Clothing TV licence and satellite TV Car tax and insurance Petrol Other (e.g. Holidays) TOTAL 13

14 Employment and Support Allowance - rates Statutory sick pay* (up to 28 weeks) Weekly rate An employed person A self-employed person N/A Assessment phase (first 13 weeks) Weekly rate A single person aged under 25 Up to A single person aged 25 and over Up to Main phase (from 14 weeks) Weekly rate A single person in Work Related Activity Group Up to A single person in the Support Group Up to How much your client would get depends on their circumstances (for example, their income) and the type of Employment and Support Allowance they qualify for. The figures quoted are correct as at May *Eligibility criteria applies to statutory sick pay and there are different sick pay rules for agricultural workers May May 2014

15 How does all this work out? If your client is employed, they will usually receive 28 weeks of statutory sick pay, after this they will enter the assessment phase. If your client is self-employed, they will enter the assessment phase three waiting days after their claim. Employment and Support Allowance consists of two phases: the assessment phase rate is paid for the first 13 weeks of your client s claim while a decision is made on their capability for work through the Work Capability Assessment the main phase starts from week 14 of their claim if the Work Capability Assessment shows that your client s illness or disability does limit their ability to work. There are two groups within the main phase: Work Related Activity Group If your client is placed in the Work Related Activity Group, they will be expected to take part in work focused interviews with their personal adviser. Your client will get support to help them prepare for suitable work. If your client is in the Work Related Activity Group and they receive national insurance contribution based Employment and Support Allowance it will only be paid for a year. After that they will have to re-apply for means-tested Employment and Support Allowance. Your client s Employment and Support Allowance can be reduced if they don t go to interviews or do work-related activity as agreed with their personal adviser. Support Group If your client is placed in the Support Group because their illness or disability has a severe effect on their ability to work, they will not be expected to take part in any work. 15

16 For more information, please contact us on: Friends Life Individual Protection, PO Box 569, Friends Life Centre, Bristol, BS34 9FE Calls may be recorded and may be monitored Friends Life and Pensions Limited An incorporated company limited by shares and registered in England and Wales, number Registered office: Pixham End, Dorking, Surrey RH4 1QA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Telephone calls may be recorded. Friends Life is a registered trade mark of the Friends Life group. FLIP/6679/Jun UNI