Discovering Aegon’s Product Offerings for Personal Life Protection

Aegon’s Personal Protection line provides:

• Life insurance (level term or decreasing term)
• Life with critical illness protection
• Life with critical illness family income benefit

These are considered some of the main benefits under the Personal Protection line. Other main benefits in the Personal Protection line include family income benefit, gift inter vivos and income protection. The client can choose as many coverage types as they want for a single policy. If a policy has more than one main benefit, the Person Insured can enjoy a discount.

Aside from the Personal Protection line, Aegon also offers mortgage life cover.

Why go with Aegon?

Here are some reasons to go with Aegon:

• Flexibility.Unlike most providers that offer a no-frills type of coverage, Aegon allows the Person Insured to enjoy more choices depending on his individual needs.  Aegon also extends your choices and allows you, at any time, to make changes to:
  • the main benefits
  • the term
  • the amount of Sum Insured
  • the Persons Insured under the policy (if it is a joint life policy)
  • the payment frequency
  • These are mainly changes that are not allowed by other providers under their basic life insurance product offerings.
• More options. Again, as opposed to no-frills life cover, Aegon’s life insurance products provides more options that can increase the level of protection, including:
  • Option to choose between family income or a lump sum for some main benefits (i.e. critical illness)
  • Renewable vs. fixed term premiums
  • Inclusion of waiver of premiums
  • Sum insured adjusted to allow for inflation
• Bigger maximum limits. With Aegon, you can have more life cover, if you need it. Some life insurance providers only allow you to purchase life cover for up to a certain monthly premium. More often than not, this cover may not adequately protect your family should something happen to you.

Quick Facts

Plan details

Types of Cover

Under the Personal Protection menu, there are a number of main benefits that the Person Insured can avail of:

• Life Term.  The policy will pay the sum insured upon the death or diagnosis of terminal illness of the Person Insured.
• Reducing life term.  The policy will pay the sum insured upon the death or diagnosis of terminal illness of the Person Insured. The Sum Insured is decreased over the years.
• Critical Illness. The policy will pay the sum insured upon the diagnosis of a covered critical illness of the Person Insured.
• Reducing Critical Illness. The policy will pay the sum insured upon the diagnosis of a covered critical illness of the Person Insured. The Sum Insured is decreased over the years.
• Life with critical illness. The policy will pay the sum insured upon the death, diagnosis of terminal illness or diagnosis of a covered critical illness of the Person Insured.
• Reducing life with critical illness. The policy will pay the sum insured upon the death, diagnosis of terminal illness or diagnosis of a covered critical illness of the Person Insured. The Sum Insured is decreased over the years.
• Family income benefit. This pays out a monthly income up to the entire length of the policy term upon the death or terminal illness of the Person Insured.
• Critical illness family income benefit. This pays a monthly income up to the entire length of the policy term if the Person Insured is diagnosed with a covered critical illness.
• Life with critical illness family income benefit. This pays out a monthly income up to the entire length of the policy term upon the death or diagnosis of a covered critical illness of the Person Insured.
• Gift inter vivos. This pays out the sum insured upon the Person Insured during the policy term. This is a seven-year special cover that is meant to cover potential inheritance tax liability within seven years after the Person Insured makes a gift/bequeaths property.

Decreasing Plans

Mainly provided to cover a mortgage, reducing benefits covers are designed to decrease the sum insured in the same way that a repayment mortgage is decreased over the years as it is paid out.

Joint Life Cover

This is available for all main benefits, except gift inter vivos or income protection, which are treated on a single life basis. Joint life policies that pay out on death will only pay once. After this payment, the policy cover will stop and no further payments will be made. Joint life cover is available as:

• Joint life first death
• Joint life second death (for life protection only cover)
• Death of a selected life (the person who is covered with life protection or life with critical illness issued on a single life basis)

Length of the Term

The policy will last for the policy term prescribed. However, some benefits may stop early, depending on maximum age limits and the Person Insured’s preference.

Additional Benefits/Options

Free Cover. This is provided free of charge to proposed Persons Insured that apply for cover. While they are waiting for their application to be approved and the policy issued, the Free Cover ensures that they are protected.  This is mainly for mortgage life insurance, to ensure that their mortgage is protected even as they wait for their property purchase to be finalized. Free cover, if offered on a life protection benefit, may also be offered on other main benefits but these cannot be more than the free cover provided for the life protection benefit.

Other details:

• This is only available to those who have been accepted on standard premiums and policy terms.
• The maximum amount of life insurance cover provided will be the lowest of:
  • £500,000
  • The amount of the mortgage
  • The amount of life cover applied for
• The term of the Free Cover begins when Aegon sends their acceptance terms or on the date that the contracts are exchanged.
• The term will end at the earliest of:
  • 90 days
  • the date the mortgage is completed
  • the date Aegon notifies the applicant that it cannot provide the insurance protection being applied for

Accidental death benefit. This is also a free cover automatically given for up to 60 days while the policy application is being processed. This is offered only for those aged 55 and below.  This is only available for plans that have life cover or family income benefit. Standalone critical illness policies are not included.

Other details:

• This is when the Person Insured dies within 72 hours after sustaining bodily injuries caused by an accident and is independent of and not related to illness, an existing physical disorder or a pre-existing illness.
• The term of the cover:
  • Start date: The date the policy application and Direct Debit instruction is submitted to Aegon.
  • End date: The earlier of
    • 60 days
    • the date Aegon notifies the applicant that it cannot provide the insurance protection being applied for
    • the day the Person Insured turns 55
    • 21 days after the acceptance terms are issued
• Sum insured: The maximum Accidental Death Benefit is the lower of the sum insured being applied for or £250,000.
• Exclusions to the Accidental death benefit:
  • Suicide or self-inflicted injury
  • Involvement in hazardous pursuits
  • Involvement in war and civil commotion
  • Abuse of alcohol or drugs
  • Pre-existing conditions
  • Flying, except if the Person Insured is a passenger riding in a commercially licensed aircraft
  • The proposed Person Insured has also applied for a similar cover from another provider
  • The proposed Person Insured has selected free cover.

Waiver of Premium. With this benefit, the Person Insured does not have to pay the premiums to his insurance policy in the event that he is unable to work because of injury or illness.

Other details:

• The Waiver of Premium benefits will start after the prescribed waiting or deferred period (which is set at 26 weeks from the date the Person Insured becomes incapacitated). During the waiting period, the Person Insured should still continue paying the premiums to ensure that the policy remains in force.
• The benefits will continue to cover the premiums for as long as the Person Insured is incapacitated. The definition of incapacity varies – this definition is selected at the start of the policy. These definitions include:
  • Own occupation: the Person Insured is unable to perform material duties related to his own occupation.
  • Any suited occupation: the Person Insured is unable to perform material duties related not just to his own occupation but also other occupations he is reasonably suited by virtue of his work experience, education and training.
  • Daily work: the Person Insured is unable to perform three or more “Activities of Daily Work”
• The cover for Waiver of Premium will end at the earliest of:
  • The Person Insured’s death
  • The Person Insured’s recovery such that he is able to return to work or no longer meets the definition of incapacity
  • The policy ceases to be in force because a main benefit has been paid
  • The Person Insured turns 65
  • The policy has reached the end of its term

Total and Permanent Disability Benefit.  This is for life cover, critical illness cover and family income benefit (or any combination of the three). This pays the Sum Insured if the Person Insured becomes totally and permanently disabled.

Other details:

• Disability may be based on three definitions: own occupation, any occupation or activities of daily living.
• This is not provided for joint life/second event policies.
• Eligibility:
  • Minimum Age at entry: 18
  • Maximum Age at entry: 63 (reviewable premiums), 59 (guaranteed premiums)
  • Minimum term: 5 years
  • Maximum term: 40 years
  • Cover ends: 64 years old

Terminal Illness Benefit. This is automatically included in any Personal Protection policy, except for gift inter vivos and income protection. This pays out the Sum Insured when the Person Insured is diagnosed with a terminal illness.

Other details:

• “Terminal illness” is defined as one that is no longer curable because there is no known cure or it has advanced such that it is no longer curable. The life expectancy of a person diagnosed with a terminal illness is no more than 12 months following the diagnosis.
• The Terminal illness benefit will not be paid if the diagnosis is made within the last 12 months of the policy.
• For the claim to be payable, the diagnosis must be backed up by medical evidence.

Critical Illness Cover. Critical illnesses that are covered:

• Alzheimer’s disease
• Aorta graft surgery
• Aplastic anaemia
• Bacterial meningitis
• Benign brain tumour
• Blindness
• Cancer
• Cardiomyopathy
• Coma
• Coronary artery bypass grafts
• Creutzfeldt-Jakob disease
• Deafness
• Dementia
• Encephalitis
• Heart attack
• Heart valve replacement or repair
• HIV infection
• Kidney failure
• Liver failure
• Loss of hands or feet
• Loss of speech
• Major organ transplant
• Motor neurone disease
• Multiple sclerosis
• Multiple system atrophy
• Open heart surgery
• Paralysis of the limbs
• Parkinson’s disease
• Primary pulmonary hypertension
• Progressive supranuclear palsy
• Pulmonary artery graft surgery
• Respiratory failure
• Rheumatoid arthritis
• Stroke
• Systemic lupus erythematosus
• Terminal illness
• Third-degree burns
• Total penumonectomy
• Traumatic head injury

Other details:

• The benefit payment is payable only if the Person Insured survives for at least 14 days from the date of the diagnosis of the critical illness
• Automatic cover includes:
  • Children’s critical illness cover: Pays out for when a child (aged 30 days to 18 years, by natural birth or legal adoption) is diagnosed with a covered critical illness. Maximum payout is no more than the lesser of 50% of the Sum Insured or £25,000.
  • Mastectomy for carcinoma in situ benefit. Pays out when the Person insured undergoes a mastectomy surgery. Maximum payout is no more than the lesser of 20% of the Sum Insured or £20,000.

  These automatic benefits will not affect the payments for critical illness.

Indexation option. This benefit allows the periodic increase of the Sum Insured to adjust for inflation. The increase will be based on the Retail Prices Index (RPI), but not more than 10%.

Other details:

• The increase will be made every year.
• The increase will be based on the RPI within the last 12 months, three months before the increase is applied to the Sum Insured.
• Indexation is only available to level life protection, level critical illness protection, level life with critical illness protection, family income benefit, critical illness family income benefit, life with critical illness family income benefit, income protection

Renewal option. The Person Insured can opt to have his policy up for review every five years. This is to save up on premiums for the first years. The policy is reviewed every five years. After the review, premiums may change or there may be additional exclusions because of the Person Insured’s medical condition.

Other details:

Eligibility:

• Minimum Age at entry: 18
• Maximum Age at entry: 63
• Minimum term: 1 year
• Maximum term: 46 years
• Cover ends: 65 years old

Legislation option. This is only for gift inter vivos and aims to protect against increases in one’s tax liability due to changes in legislation. This option increases the benefit amount or the benefit term when inheritance tax laws warrant the increase of the taxes they have to pay. This increase is provided without the need to present any further medical information.

Other details:

• The new policy’s benefit amount is capped by the lower of:
  • Two times the sum insured in the original policy (at the time it started)
  • The amount of potential tax liability
• The new policy’s term is capped by the shorter of:
  • The remaining term of the policy plus seven years
  • The time needed to cover tax liabilities
• The option is to be taken within six months that any legislation affection inheritance tax is promulgated
• Eligibility:
  • Minimum Age at entry: 18
  • Maximum Age at entry: 72
  • Minimum term: 7 years
  • Maximum term: 7 years
  • Cover ends: 79 years old

Guaranteed Insurability Option. This increases the amount of the sum insured for certain life events, without the Person Insured submitting additional medical evidence.

Other details:

• For life protection and family income benefit plans, there must be one year remaining on the original term.
• For plans that include critical illness and income protection as main benefits, there must be at least 5 years remaining for these main benefits.
• The guaranteed increases are capped at £150,000 for cash sum benefits or £10,000 per year for income benefits.  For income protection, the maximum benefit limit of the policy is £130,000 annually.  The Person Insured cannot go over this limit by applying for the guaranteed insurability options. There is also an income protection limit of 55% of the Person Insured’s total pre-incapacity income.
• The maximum limit applies to all increases. The Person Insured can use the guaranteed insurability option for as many times as applicable but the overall increase should not be more than the above limit.
• The life events include:
  • Marriage or entry into a civil partnership
  • Parenthood, whether by birth or adoption
  • Getting a new mortgage or increasing the value of the existing mortgage due to home renovations
  • Promotion or job change that results in an increase in salary (for employees only, those who are self-employed, are a controlling director of the company or who have control of their salary increases are excluded)
  • Increase of interest in the company or business loan (if the Person Insured is a key person or business partner)
  • Increase in a business loan or net relevant earnings (for a sole trader)
  • This option is only for those that are issued on a standard premium basis, where there are no extra premiums or additional policy exclusions due to the Person Insured’s medical condition.
• This option is not available for gift inter vivos.

How to make a claim

For life claims, these are the usual requirements:

• Death certificate of the Person Insured
• Birth certificate of the Person Insured (to show real age)
• Proof that the claimant is the legal beneficiary (i.e. marriage certificate, will, etc.)
• Police reports/doctor’s reports, where applicable
• Other documents that Aegon may require to help them assess the claim

Other documents may be required for different benefits:

• Critical illness: Doctor’s report and clinical evidence
• Total and Permanent disability: clinical evidence and recognized tests
• Guaranteed insurability options: The following documents may be required, where applicable:
  • Copy of birth or adoption certificate of the Person Insured’s child
  • Copy of the marriage or civil partnership certificate
  • Copy of loan offer
  • Written confirmation of salary increase or new income from the Person Insured’s employer
  • Evidence of increase in income
  • Copy of financial accounts

The content of this article is provided for informational purposes only and is not created to be a financial advice. Contact Aegon (http://www.aegon.co.uk) directly for details about their offerings.
Updated on: 08.06.2013

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