Overview of Legal & General's Personal/Mortgage Protection Life Insurance Products

Legal & General’s Life Insurance Product offerings fall under 3 major product categories:

This article will concentrate on personal/mortgage protection life insurance products and not on business protection products. The products featured in the article are:

Quick Facts

Mortgage Term Assurance

  Mortgage Term Assurance Mortgage Decreasing Term Assurance Mortgage Term Assurance with Critical Illness Cover Mortgage Decreasing Term Assurance with Critical Illness
Primary purpose of product

Covers a mortgage to ensure that it is paid, even at the Person Insured’s death, terminal illness or critical illness (if this is included).

Plan basics

Will pay the sum insured upon death or diagnosis of terminal illness.

- The policy is designed for an interest-only mortgage.

Will pay the sum insured upon death or diagnosis of terminal illness.

- The policy is designed for a repayment  mortgage, where the sum insured is decreasing.

Will pay the sum insured upon death or diagnosis of critical  illness.

- The policy is designed for an interest-only mortgage.

Will pay the sum insured upon death or diagnosis of critical illness.

- The policy is designed for an repayment  mortgage.

Cover Limits
Minimum

No minimum, but depends on minimum premium.

Maximum

No maximum but if conversion option is included, cover is capped at £1,000,000 for all policies with Legal & General

No maximum but if conversion option is included, cover is capped at £1,000,000 for all policies with Legal & General

£3,000,000 for Total Permanent Disability (TPD) – Specified work tasks definition

£2,000,000 for TPD Own Occupation

£3,000,000 for Total Permanent Disability (TPD) – Specified work tasks definition

£2,000,000 for TPD Own Occupation

Cash-in value

None

Eligibility
Minimum age at entry

17

17

17

17

Maximum age at entry

77

74

62

59

Other eligibility requirements

Must be a permanent resident of the UK

Must be a permanent resident of the UK

Must be a permanent resident of the UK

Must be a permanent resident of the UK

Length of Cover
Minimum term

- 1 year (without conversion or indexation)

- 2 years if indexation is included

- 10 years if conversion option is included

5 years

2 years

5 years

Maximum term

40 years

40 years

40 years

40 years

Minimum age

29 years old

29 years old

29 years old

29 years old

Maximum age

79 years old

79 years old

69 years old

69 years old

Premiums

Premiums can either be paid monthly or annually

Minimum premium

£6

Maximum premium

No maximum, based on the Maximum Sum Insured and benefits included

Guaranteed premiums

Yes, assuming no changes are made to the policy

Reviewable premium

Yes, review performed every 5 years

Additional benefits
Terminal illness

Yes, but only for plans with terms two years of more

Accidental death benefit

Yes, while policy application is being processed

Joint life cover

Yes, only for Joint Life Cover, first death

 

Free cover

Yes, maximum of 90 days, from the time contracts are exchanged and completed

Critical illness cover

Not applicable

Not applicable

Yes

Yes

Premium protection

Optional , due to incapacity

Conversion option

Optional, to be added at the beginning of the policy term

Separation option

Yes

Guaranteed insurability option

Yes

Extra cover feature

-Smooth Move

-Immediate cover facility

-Indexation (only if conversion option is not chosen)

-Smooth Move

-Immediate cover facility

- Children’s Critical Illness Cover

- SmoothMove

- Immediate Cover Facility (for life coverage only)

- Children’s Critical Illness Cover

- SmoothMove

- Immediate Cover Facility (for life coverage only)

Family/Personal Protection

Aside from Life Insurance coverage, this line of product also offers:

  Level Term Assurance Level Term Assurance with Critical Illness Cover Over 50s Life Plan
Primary purpose of product

Provides a lump sum to the Person Insured’s family upon his death or diagnosis of terminal illness.

Provides a lump sum to the Person Insured’s family upon his death or diagnosis of critical illness, including terminal illness.

Provides a lump sum towards inheritance taxes, end of life expenses (i.e. funeral expenses) or for the needs of the family.

Plan basics

Will pay the sum insured upon death or diagnosis of terminal illness.

- The sum insured remains level throughout the life of the policy

Will pay the sum insured upon death or diagnosis of critical  illness.

- The sum insured remains level throughout the life of the policy

Will provide whole of life insurance coverage.

- Can be an increasing (based on Retail Prices Index) or fixed plan

- Death benefit is paid if the Person Insured dies after the second year of the plan

- For the first two years of the plan, the Sum Insured will be paid for Accidental Death

- Acceptance is guaranteed for those who meet the eligibility requirements

Cover Limits
Minimum

No minimum, depending on minimum premium

No minimum, depending on minimum premium

No minimum, depending on minimum premium

Maximum

No maximum but if conversion option is included, cover is capped at £1,000,000 for all policies with Legal & General

£3,000,000 for Total Permanent Disability (TPD) – Specified work tasks definition

£2,000,000 for TPD Own Occupation

No maximum but the initial premiums of all Over 50s plans from Legal & General should be not more than £50 a month

Cash-in value

None

None

None

Eligibility
Minimum age at entry

17

17

50

Maximum age at entry

77

62

80

Other eligibility requirements

Must be a permanent resident of the UK

Must be a permanent resident of the UK

Must be a resident of the UK and residing in the UK at least 183 days a year

Length of Cover
Minimum term

- 1 year (without conversion or indexation)

- 2 years if indexation is included

- 10 years if conversion option is included

2 years

Not applicable

Maximum term

40 years

40 years

Coverage throughout life

Minimum age

29 years old

29 years old

Not applicable

Maximum age

79 years old

69 years old

Not applicable

Premiums

Premiums can either be paid monthly or annually

Premiums can either be paid monthly or annually

Premiums can either be paid monthly or annually

Premium payments stop ay the 90th birthday, but cover will continue for the whole of life

Minimum premium

£6 monthly

£6 monthly

£8 to £15 monthly, depending on age

Maximum premium

No maximum, depends on the maximum benefit available

No maximum, depends on the maximum benefit available

No maximum, depends on the maximum benefit available

Guaranteed premiums

Yes, provided no changes are made to the cover

Yes, provided no changes are made to the cover

Yes, for fixed plans

Reviewable premium

Not applicable

When selected, premiums can be reviewed every 5 years

Yes, for increasing plans

Additional benefits
Terminal illness

Yes, but only for plans with terms two years of more

Yes, but only for plans with terms two years of more

No

Accidental death benefit

Yes, while the application is being processed

Yes, while the application is being processed

Yes, while the application is being processed

Joint life cover

Yes, joint life first death

Yes, joint life first death

Yes, joint life 1st event or joint life 2nd event

Critical illness cover

Not applicable

Yes

No

Premium protection / Waiver of premium

Optional , due to incapacity

Optional , due to incapacity

Yes, only up to age 60

Conversion option

Optional, to Whole of Life Protection Plan

None

None

Separation option

Yes

Yes

Yes

Indexation option

Yes, but not available if conversion option is added

None

Yes – the Increasing Plan will involve a review of the Sum Insured every year, premiums will also increase along with the increase in Sum Insured

Guaranteed insurability option

Yes

None

Yes

Extra cover feature

- Children’s Critical Illness

- Immediate Cover Facility (for life coverage only)

- Immediate Cover Facility

- Funeral Benefit (Optional)

Plan Details

Payment

The policy will pay out the death claim when the Person Insured dies within the plan term and as long as the policy remains in force.

Eligibility

The products are specifically designed for permanent UK residents, including those who are in the Merchant Navy and Crown Employees. Persons outside of the UK can be covered if:

Number of Policies

More than one policy can be allowed, as long as the total monthly premium does not exceed the maximum limit.

Cash-In Value

There are no cash-in values for the plans.

Premiums

Premiums can be:

Additional Benefits/Options

Terminal Illness Benefit

The Terminal Illness Benefit pays the Sum Insured when the Person Insured is diagnosed with a Terminal illness. This terminal illness is such that it has no known cure or is advanced or has rapidly progressed into a condition that is no longer curable. Also, the illness is reasonably expected to lead to death no greater than twelve months after the date of the diagnosis.

Other details:

Accidental Death Benefit

This is automatically provided for life policies for free for up to 90 days; while the policy application is being processed (starting from the time the policy application is submitted for underwriting). This benefit will pay the accidental death benefit for up to a maximum of £300,000 or the Sum Insured, whichever is lower.

Other details:

Free Life Cover

For mortgage life insurance cover, this provides free insurance coverage between the exchange and completion of mortgage contracts. Once the proposed Person Insured commits to buying the policy but the mortgage life cover still is not in force, this will ensure that the family is still able to buy the property from the proceeds of the free life cover.

Other details:

Immediate Cover Facility

While the policy application is being underwritten and evaluated, this provides life insurance cover for up to 60 days. The maximum for this benefit is £3,000,000 or the amount of cover applied for, whichever is lower. The benefit will not cover death due to suicide, self-inflicted injury, being involved in dangerous hobbies and activities and incidents while the Person insured is outside of the UK.

Critical Illness Cover

This pays a specified amount (usually the same as the sum insured) in the event the Person Insured is diagnosed with a covered critical illness. The critical illness must also be included in the list of covered critical illnesses and must meet the definitions provided in the policy. The critical illness cover automatically includes children’s critical illness.

The Critical Illness Cover will pay if the Person Insured is diagnosed with:

Partial payments (the lower between £25,000 and 25% of the critical illness cover amount) will be made for diagnosis of the following:

Total and Permanent Disability may be based on various definitions (i.e. Own Occupation, Work Tasks etc.) The definition of total and permanent disability will apply to both Persons Insured for joint life policies.

Other cover details:

Guaranteed Insurability Option

This allows the Person Insured to increase the Sum Insured for specific life events. For life insurance cover, the Sum Insured can be increased when:

The allowable increase per life event is the lower of:

The maximum amount for all increases is £200,000.

Other cover details:

Premium Protection/Waiver of Premium

This pays for the life insurance premiums in the event that the Person Insured becomes incapacitated because he is ill or injured due to accident and is unable to earn an income. The waiver of premium will start after the deferred or waiting period.

Benefit details:

Conversion Option

Available only for Mortgage Term Assurance and Term Assurance policies. This is to be selected at the beginning of the policy. This allows the plan to be converted to a Whole of Life Protection plan, without having to provide additional medical evidence.

Other details:

Indexation Option

This is available for term assurance, mortgage term assurance and whole of life protection plan. This increases the Sum Insured in line with the inflation rate as indicated by the Retail Prices Index, without the need for providing further medical evidence.

Other details:

Separation Option

This is for joint life policies. This allows the Persons Insured to get separate cover when:

The original policy is cancelled and a new single life policy is issued for each Person Insured.

Other details:

SmoothMove

This benefit is a 24-hour rescue service provided when the Person Insured and his immediate family is moving in to a new house whose mortgage is covered by Legal & General’s Mortgage Term Assurance.

This includes benefits of up to £750 on the day of the move:

This includes benefits of up to £250 for up to 90 days after occupation of the new residence:

Exclusions

The cover will not pay for:

Life Cover

- Suicide within the first 12 months from the time the plan starts. For plans that are assigned to a third party, the length of the period may be longer.

Critical Illness Cover

- For causes that are specifically excluded in the policy document

- The illness does not meet the definitions of the critical illness

- Suicide or attempted suicide within the first 12 months from the time the plan starts

- For children’s critical illness cover, if the condition was hereditary congenital, or pre-existing before the policy was issued or if the child failed to survive within 14 days from the time the critical illness is diagnosed

Waiver of Premium (Whole of Life plans)

Incapacity is caused or aggravated by:

- Attempted suicide or self-inflicted injury

- Abuse of alcohol or drugs, unless the drugs are prescribed by a registered doctor practicing in the UK

- War, riots and acts of war, whether directly or indirectly

How to Make a Claim

When making a death claim, Legal & General will usually require the following:

For critical illness claims, Legal & General may require a medical examination and the diagnosis must be made by a medical specialist that is a consultant at a UK hospital and whose specialty covers the sickness being diagnosed.

Approved countries include Australia, Austria, Belgium, Bulgaria, Canada, the Channel Islands, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hong Kong, Hungary, Iceland, the Isle of Man, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Ireland, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

To secure your family's future, fill in the form on the right and get your term life insurance quote now.

Types of insurance:
Term life insurance 101:
Life insurers:
*Scottish Provident 2012 life cover claims paid report.
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