Flexible Protection Plan Protecting your lifestyle and family with one simple plan
Contents Introduction Income Protection Life Protection Critical Illness Protection Protection with a heart Extra things you need to know Our Flexible Protection Plan at a glance 3 4 6 8 10 12 14 You can get this and other documents from us in Braille, large print or on audiotape by contacting your financial adviser. Relax, we ve got it covered 2
Let LV= take care of tomorrow so you can relax and enjoy today. Like many people you might think life s too short to worry about what might go wrong in the future. We agree! That s why protection is such a good idea. It means you and your family can relax and enjoy life today knowing if something does go wrong tomorrow money needn t be an issue. When it comes to protection everyone is different. That s why we ve put a variety of popular protection products into one easy plan. Our Flexible Protection Plan includes: Income Protection Life Protection Critical Illness Protection Depending on your situation you can pick and mix from our menu or just buy one, it s up to you. You must be a UK resident to take out any of the policies in this plan. Money makes your world go round When life s going well, it s easy to take money for granted. It pays the bills and funds your lifestyle, so you can enjoy life. But what if the money stopped? It s not difficult to picture how different life would be if your income suddenly stopped particularly if your health or a serious injury meant you couldn t work. Having protection can t reduce the odds of something happening to you but it can make life easier if it does. Money from our Flexible Protection Plan could help to safeguard you and your family s lifestyle and get you back on your feet. It could give you: A regular monthly payment to help you pay your mortgage payments if you can t work because of an accident, sickness or disability. A lump sum if you: are diagnosed with one of over 35 serious medical conditions suffer health problems which leave you permanently unable to work or care for yourself become terminally ill or die. 5 star rated cover Both our Income Protection and Combined Life and Critical Illness policies have achieved a coveted Defaqto 5 Star Rating which means they re amongst the best quality products in the market, with an excellent range of features and benefits and very high cover levels. 3
Income Protection Money to help safeguard your standard of living if you can t work because of accident or sickness. Being off sick for more than a few weeks can be a worry, especially if you don t have much in the way of savings, or a partner s income to fall back on. In the longer term, your lifestyle could even be at risk. Income Protection provides you with a monthly income to help pay your bills and prevent you from getting into debt, if you can t work because of long term sickness or an accident. What is Income Protection? It s an insurance policy that pays you a monthly income if you can t work because of an accident or sickness. Put simply income protection works when you can t. Policy details Your financial adviser will explain how our Income Protection can help. The following page provides some of the details you might want to discuss with them. Protection for every eventuality You ll be covered for most types of accident, sickness, medical condition or disability provided it s serious enough to stop you working or carrying out certain household tasks if you re a homemaker. A choice of waiting periods You can choose how long to wait before we start paying out on a claim; 1, 2, 3, 6, 12 or 24 months. Normally the longer the waiting period, the cheaper the premium. Claim durations to suit you With our full protection there s no time limit, if you remain eligible we ll keep paying until your policy ends. With our Budget Income Protection, each claim period is limited to a maximum of two years. If you re a homemaker we ll pay out a monthly benefit for up to a maximum of two years after that your policy will stop. 4
Unlimited number of claims You can claim as many times as you need to. If you re a homemaker and take out our Budget Income Protection we ll cancel the policy after two years benefit payments have been made. Your premiums You have the choice between guaranteed premiums (which means they ll stay the same for the length of your policy) or reviewable premiums (which means we can change them) Protection for as long as you need it You can normally keep your protection going up to age 70 (cover for some occupations ends before age 70). Protection that keeps pace with rising prices Inflation will reduce the buying power of any income we pay you over the years. To help prevent this, you can choose to link your cover to the Retail Prices Index. If you do this, your premiums will go up each year in line with the Index to pay for your extra protection. Protection from the taxman Your protection benefits can normally be paid to you tax-free (there s no income tax or capital gains tax to pay). Tax treatment depends on your personal circumstances. Any references we make to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which can change. Protection amounts to suit you The aim of the policy is to cover up to half your monthly income before tax. Your financial adviser will help you choose the amount of protection you need. Depending on your needs you can choose for your cover to be fixed or increase each year with inflation. It s important you regularly review these needs with your financial adviser to make sure you are not over or under insured. 5
Life Protection Money to pay off your debts and take care of your family if you die or become terminally ill. Coping without you would be difficult enough for your partner or family, but without the security of your financial support it would be even harder. The money from Life Protection could help them to: Pay off the mortgage Repay loans or credit card debts Cover funeral expenses Invest it as a nest egg for the future Pay for children s education or child care Manage other living expenses What is Life Protection? It s an insurance policy that pays out a lump sum when you die. If you become terminally ill before the last 12 months of the plan, we ll pay the lump sum early. Policy details Your financial adviser will explain how our Life Protection can give you and your family greater financial security. Here are some of the details you might want to discuss with them. Your protection choices We offer three types of life protection: Level cover the amount you re covered for is fixed when your policy starts. Please be aware that inflation will reduce the buying power of the level of cover you choose. Inflation-linked cover the amount you re covered for goes up each year in line with the Retail Prices Index (and so do your premiums). This helps you keep pace with inflation. Decreasing cover for repayment mortgages and loans the amount you re covered for reduces in line with how much you have left to pay on your mortgage or loan (assuming you keep up-to-date with your payments). This cover caters for up to a maximum interest rate of 12%. There s no waiting period before a claim is paid. We ll pay the money as soon as the claims process is complete. 6
Your premiums Premiums are guaranteed. This means they ll stay the same for the length of your policy (unless you choose inflationlinked cover). Protection for as long as you need it You can choose any term for your policy (from five to 45 years) but you must be under age 85 when your protection stops (under 70 for inflation-linked protection). Adaptable protection If you re using the protection for a mortgage you may be able to switch it to a new loan if you move house. And, you can apply for extra cover if you need it, or even reduce it. What about tax? Payments from the policy will normally be free from income tax and capital gains tax. We usually pay the cash lump sum from the plan to your estate, unless you put the policy in trust. If the total value of your estate is more than the inheritance tax nil rate band when you die, it could be subject to inheritance tax. Tax treatment depends on your personal circumstances. Any references we make to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which can change. 7
Critical Illness Protection Money to take care of you and your family, or repay your mortgage if you re diagnosed with one of over 35 medical conditions. Being diagnosed and suffering from a critical illness can be emotionally and physically draining, disrupting your ability to earn a living or care properly for yourself and your family. Whether you make a speedy recovery or have to cope with spells in hospital, our Critical Illness Protection can provide a one-off sum of money to help you through. What is Critical Illness Protection? It s an insurance policy that pays out a lump sum if you survive 14 days or more after being diagnosed with one of over 35 conditions covered by our policy. Policy details Your financial adviser will explain how our Critical Illness Protection can give you and your family greater financial security. The following page provides some of the details you might want to discuss with them. Protection for over 35 conditions We ll pay out a lump sum if you survive 14 days after being diagnosed with one of the conditions included in your policy (for example certain types of cancer, heart attack or stroke). We only cover the critical illnesses defined in our policy and no others. Even if you make a full recovery, the policy still pays out. Options to suit you You can choose to have a Critical Illness Policy on it s own, or combine Critical Illness Protection with Life Protection. You can also decide if you want to include Permanent Total Disability which will pay out if any other illness, condition or disability is so severe that it permanently prevents you from ever going back to work, or permanently prevents you from taking care of yourself at home without help. As much protection as you need We offer three types of critical illness protection: Level cover the amount you re covered for is fixed when your policy starts. Please be aware that inflation will reduce the buying power of the level of cover you choose. Inflation-linked cover the amount you re covered for goes up each year in line with the Retail Prices Index (and so do your premiums). This helps you keep pace with inflation. 8
Decreasing cover for repayment mortgages and loans the amount you re covered for reduces in line with how much you have left to pay on your mortgage or loan (assuming you keep up-to-date with these payments). This cover caters for up to a maximum interest rate of 12%. Your premiums If you only buy Critical Illness Protection your premiums will be reviewable. This means that we can change your premium over the length of your policy. If you buy Combined Life and Critical Illness Protection you have the choice between guaranteed (which means they ll stay the same for the length of your policy unless you choose inflation-linked cover) and reviewable premiums. The cover they ll get will be half of yours, up to a maximum of 25,000. Your own cover and premiums won t be affected. Adaptable protection If you re using this protection for a mortgage you may be able to switch it to a new loan if you move house. And, you can apply for extra cover if you need it, or even reduce it. Protection from the taxman Payments will normally be paid tax-free. Tax treatment depends on your personal circumstances. Any references we make to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which can change. Protection as long as you need it You can choose any term from five to 40 years up to age 70 for your policy. Protection for your children at no extra cost If you have children, we ll cover them for all the illnesses listed under the main policy (except Total Permanent Disability). 9
Protection with a heart When you take out a protection plan with LV= you ll be able to take advantage of the following benefits absolutely free. Extra Care We re here to support you emotionally as well as financially. So, if you re diagnosed with a serious illness, our free Extra Care service will offer you and your family the practical and emotional support you need. Depending on the nature of your claim, it s available if you claim under our Critical Illness Income Protection or Mortgage Payment Protection policies. You ll have direct access to a personal nurse adviser who can give you valuable help throughout a difficult time. As well as talking to you on the phone their knowledge and experience can help you access a network of care services, equipment providers, charities and self-help groups. They can also arrange therapies, counselling and home visits by a nurse or occupational therapist specialising in your condition who can assess your needs and write a report for your doctor. This can help you quickly access any special services or equipment you need. It s provided for us by Red Arc, one of the UK s leading Care Advisory Services. Membership When you take out a protection plan, you ll automatically become a member of LV=. Benefits include: Discounts on our products You ll have access to a range of discounts and enhancements on our other protection, savings and investment products plus Car, Home, Travel and Pet insurance. Access to the LV= Member Care and Support Line Our Member Helpline is a support service exclusively for members. It s available 24/7 and provides members with confidential, expert advice from qualified professionals on a range of legal and medical issues. The opportunity to have a say in the running of our business Members can vote at our Annual General Meeting and have a say in how the society is run. For more detailed information on member benefits, please ask your financial adviser or visit us at www.lv.com/members 10
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Extra things you need to know The importance of paying your premiums We provide your protection in return for you paying your premiums each month. If you forget to pay, or don t have enough money please talk to us. We ll give you 60 days to put this right, but if you don t pay then we ll have no choice but to stop your protection. After that you won t be able to claim. Because this is a pure protection plan, you won t get any money back if you decide to stop paying premiums. Your cover will normally stop after 60 days. How benefits are taxed Many benefits paid out by this plan are currently tax-free (however life protection might be subject to inheritance tax in certain circumstances). About making a claim There are no standard exclusions relating to this plan (this means there is no small print and we pay out regardless of the cause of claim; some insurers have standard exclusions for things like acts of war, AIDS, and suicide but we don t). We aim to treat every claim fairly and with individual consideration, in line with strict guidelines set out by the Association of British Insurers. Each type of protection has a different set of conditions setting out exactly when we will and won t pay a claim. Please read these carefully so you know what to expect. We will need evidence before paying a claim, for example to prove your age, occupation and medical condition. We aim to assess claims and pay out benefits as quickly as possible. By tax-free we mean free of income tax and capital gains tax; this is based on our current understanding of tax rules and HM Revenue and Customs practice, which is subject to change. Tax treatment depends on individual circumstances so if you re in any doubt, please speak to your financial adviser. 12
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Our Flexible Protection at a glance To help you select the protection you need, here s a quick comparison. When you might need it When you can claim Money saving options Income Protection If you need money to live on when you re off work sick for a prolonged period of time. If you can t work because of: Sickness Accident Disability Budget protection is available. Choice of waiting periods available. Life Protection If you need to make sure your family is secure and/ or mortgage or other debts are paid off if you die. If you die or become terminally ill. It can be combined with Critical Illness Protection. Critical Illness Protection If you need money to support you and pay for further care while you recuperate from a serious medical condition; or in case you can never work again. The lump sum may also be used to help pay off a mortgage or other debts. If you or one of your children get a Critical Illness covered by the plan. Option to include cover for Permanent Total Disability or have this on its own. It can be combined with Life Protection, and/ or linked with Mortgage Payment Protection. 14
What it pays out When it pays out How the money is taxed A regular monthly income, to the end of the term of your plan if necessary. The budget cover option pays out for a maximum of two years. You choose the time delay 1,2,3,6,12 or 24 months after you become sick or have an accident. It is normally tax-free. A one off lump sum can be paid when the legal process of winding up your estate is complete. (If written in Trust, the money can be paid immediately). As soon as possible after the claim is made, although in some cases the beneficiaries may not be entitled to receive the money until your estate has been officially wound up. It s normally paid into your estate (unless you put it in trust) and may be subject to inheritance tax. A one off lump sum if you survive 14 days after being diagnosed. If you have selected our Combined Critical Illness with Life Protection cover then a lump sum to your estate on death. If you survive 14 days after diagnosis or on death if you have selected our Combined Critical Illness with Life protection. It is normally tax-free. 15
WINNER LV.com Protection Pensions Annuities Equity Release Investments LV= and Liverpool Victoria are registered trade marks of Liverpool Victoria Friendly Society Limited (LVFS) and LV= and LV= Liverpool Victoria are trading styles of the Liverpool Victoria group of companies. LVFS is authorised and regulated by the Financial Services Authority, register number 110035. LVFS is a member of the ABI, AFM and ILAG. Registered address: County Gates, Bournemouth BH1 2NF. Telephone: (01202) 292333. 21118472 02/11