INCOME PROTECTION BENEFIT PLAN (IPB) AND FACTS AND FEATURES SIDE BY SIDE. It s our aim to make selling income protection as simple as possible. Here, we ve compared the features of our Income Protection Benefit Plan with those of our Lifestyle Cover to help make it easier for you to see how they can work together. This is not a consumer advertisement. It is intended for financial advisers and should not be relied upon by private investors or any other person.
IPB Premium frequency Monthly or annually. Monthly or annually. Premium rates Deferred periods Guaranteed. 4, 13, 26 or 52 weeks. Reviewed at 12 months if contract renewed. 30, 60, 90 or 180 days deferred period for accident or sickness. 30, 60 or 90 days deferred period for unemployment. Minimum benefit Subject to minimum premiums. Subject to minimum premiums. Maximum benefit Length of benefit payments When are benefits paid? 60% of first 30,000 gross annual earnings plus 50% of excess over 30,000. For those self employed for less than 12 months the maximum benefit is 35% of pre-incapacity earnings. There is an overall maximum benefit of 200,000 per year ( 16,667 per month). Considered to be a houseperson; working less than 16 hours per week, are not in paid employment or are not working at the time of claim, the maximum benefit of 20,000 per year ( 1,666.67 per month) applies. Monthly benefit paid until the client recovers and returns to work, the policy ends or the client dies, whichever occurs first. If the Low Cost Option is chosen the monthly benefit will be payable for no more than a total of five years. Benefit payments will start one month after the end of the deferred period and will then be paid monthly in arrears. The lower of: 65% of the gross monthly income 3,000. Monthly benefit paid up to 12 months or until client returns to work (whichever happens first). Benefits paid are dependent on which payment option your client has chosen. Standard: the first payment of benefit is made 31 days after the deferred period ends. Any subsequent payments are made at 30 day intervals. Back to Day One: the first payment of benefit is made at the end of the deferred period. Any payment is calculated back to the first day of the claim. Any subsequent payments are made at 30 day intervals. Deductions at claim Deductions applied as follows if, when added to the monthly benefit payable, exceeds the maximum benefit limits or the income guarantee (whichever is greater): 60% of continuing gross income (such as sick pay) 60% of dividends if represent share in net trading profit 60% of gross income from investments if taken into account in determining earnings for the monthly benefit 60% of ill-health pension/early retirement schemes if payable for the same incapacity Any regular payments from any other insurance policies due to incapacity. Employment related non-means-tested state benefits (such as contributory Employment and Support Allowance (ESA) and Statutory Sick Pay) are not deducted. Benefit is still paid if in receipt of (this applies to accident and sickness cover only) statutory sick pay. If any claim arising under this policy is also covered or covered in part by any other Legal & General Lifestyle Cover policy, the total benefit paid can t exceed 65% of your client s gross monthly income or 5,000, whichever is lower irrespective of the number of policies you hold.
Incapacity/disability definition IPB Occupation classes 1, 2, 3 and 4: Own occupation. Houseperson: Activities of Daily Living. These are a list of daily activities Legal & General use to determine your client s level of incapacity. Please see our key features document for full details. Physical or mental condition that prevents your client from carrying out their normal occupation (this applies to accident and sickness cover only). Claim notification Within two weeks of incapacity where four week deferred period is chosen, otherwise within four weeks for all other deferred periods. As soon as possible and within 180 days of the date last in work. Illness and injury exclusions Alcohol and/or solvent or drug abuse. Any exclusions as specified in the policy schedule. Incapacity caused by normal pregnancy is not covered. 12 month pre existing condition. Disabled due to normal pregnancy. Self inflicted injury. Alcohol or drug abuse. Incurred during a criminal act. War and civil commotion. Disability due to operation or treatment not medically necessary including beauty treatment or cosmetic injury. AUTOMATIC FEATURES AT NO EXTRA COST Additional exclusions apply for unemployment cover. Full details of these exclusions are in the policy booklet, sections 4 and 5. Waiver of Premium Premiums are waived when receiving benefit payment. Hospitalisation Benefit After seven consecutive nights in hospital, 1/30th of the monthly benefit (up to 150 per night whilst in hospital) will be paid for a maximum of 13 weeks. Death benefits An amount equal to the annual premium or 12 times the monthly premium being paid at the time of death. Guaranteed Insurability Option Clients can increase their cover during the length of the policy without needing to answer any further medical questions if their circumstances change. For example: an increase in salary (due to a promotion or change of job) increase in mortgage amount on every third policy anniversary. This feature is automatically included if accepted on normal rates before 45th birthday. This option must be exercised before 50th birthday and within six months of each event. Can exercise option a maximum of three times. The maximum amount the monthly benefit can be increased on each occasion is 50% of the original monthly benefit, subject to a maximum of 833.33 per month ( 10,000 per annum).
IPB Available policy changes Can increase or decrease the length of the policy, reduce the monthly benefit, change the deferred period, or change the frequency of premium payments (annually to monthly or monthly to annually). Underwriting may apply and eligibility rules apply. Can ask to change cover options if circumstances change. Continuous cover Available during statutory maternity, paternity or adoption leave, career break and periods of unemployment. Proportionate benefit If following a valid claim, the client returns to work on reduced earnings as a result of their incapacity, then a proportionate benefit is payable. This is reduced in proportion with the client s new earnings. Linked claims If the client needs to claim again for the same or related cause within 12 months of returning to work, then the deferred period won t apply. If the client needs to claim again for the same disability within 90 days of returning to work, then we treat this as one claim; the deferred period won t apply but the maximum 12-month benefit period applies to the total claim. If they claim again relating to the same disability, at least 90 days after returning to work or for a claim relating to a different disability, then these will be treated as new claims, so the maximum 12-month period and deferred period will apply to this second claim. OPTIONAL FEATURES WHICH MAY INCUR AN ADDITIONAL COST Low Cost Option For a reduced premium, the maximum claims period is limited to a combined total of five years, which does not need to be consecutive. Not available if Stepped Benefit selected. Indexation To keep the cover in line with increases in the Retail Prices Index (RPI), the client can increase the monthly benefit by the RPI (more than 1%, max 10%) on every policy anniversary. The premium will increase by the change in RPI multiplied by 1.5. Stepped Benefit Two deferred periods and two monthly benefits are allowed within a single policy. This is useful for the client if they wish to integrate their benefits more closely with employer provided benefits. Not available if Low Cost Option selected. Unemployment cover This will pay a monthly benefit if the client becomes unemployed through no fault of their own for up to 12 months. This will also pay a monthly benefit if: the client was to leave employment to become a full time carer for a member of their immediate family, if the client s employer puts them on short-term working hours. Automatically includes access to an unemployment assistance service a job search service providing support and information, including CV production, a job database and skills manual.
TWO GOOD QUESTIONS TO GET YOU STARTED: 1. Do you always consider both short and long term protection cover in the most cost effective way for your clients? 2. Does your chosen solution take into account any relevant deferred periods and your clients existing policies? The following products are designed to pay a monthly benefit to help protect your client s income if they were unable to work due to an illness, injury or unemployment. The Income Protection Benefit Plan (IPB) helps to provide a monthly benefit if your client is unable to work due to incapacity caused by illness or injury leading to a loss of earnings during the length of the policy. If your client is classed as a houseperson (see Maximum Benefit on page 2), the benefit could help meet additional expenditure. Lifestyle Cover provides a monthly benefit if your client is unable to work due to accident, sickness or involuntary unemployment. The benefit will be paid after a deferred period for up to 12 months or until they return to work, whichever happens first. So your client can concentrate on recovering or finding new employment without fear of changes to their lifestyle or losing their home. The following table gives an overview of both products. Please refer to the Key Features Documents for more details of the policy benefits and limitations. IPB What do these products cover? Pays a monthly benefit should the client be unable to work due to incapacity caused by an illness or an injury, resulting in a loss of earnings during the length of the policy. Pays a monthly benefit to help protect your client s income whilst they are unable to work due to accident, sickness or involuntary unemployment for up to 12 months. Choice of cover Product type Incapacity caused by an illness or an injury only. Long-term income protection. Accident and sickness only. Accident, sickness and unemployment only. Unemployment only. Short-term income protection. Underwriting Medically underwritten at application. Financially underwritten at point of claim. Medically underwritten at point of claim, not at application. Employment status This cover is available for employed, self-employed and housepersons. This cover is available for contract, self-employment, full time and part time workers provided they work at least 16 hours per week. No occupations are excluded. Joint life cover No. Joint applicants are accepted. Entry age limits Term of policy Selected expiry date 18 to 59 years old. Minimum length of policy is five years (aged 45 or over). No maximum except for years implied by minimum term and selected expiry date (see below). Any ages between 50 to 70. The plan should end no later than the client s planned retirement date. 18 to 64 years old. Annually renewable. 12 months from start of policy (this is an annually renewable contract).
www.legalandgeneral.com Legal & General Assurance Society Limited Registered in England and Wales No. 166055 Legal & General Insurance Limited Registered in England and Wales No. 423930 Legal & General Partnership Services Limited Registered in England and Wales No. 5045000 Registered office for all companies: One Coleman Street, London EC2R 5AA This is also where our head office is in the UK. We are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. W12792 02/15