Key Features of Aviva’s Comprehensive Life Insurance Product Offerings

Aviva’s comprehensive life insurance product offerings include:

• Guaranteed Whole of Life
• Term Assurance (with or without options)
• Mortgage Life Insurance / Decreasing Life Insurance
• Guaranteed Lifelong Protection / Over 50s Life Insurance

Quick Facts

The life insurance products from Aviva are actually basic life insurance products that are further enhanced by options and additional benefits, some of which are 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.

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, except for the Whole of Life policy when the premiums are paid in one lump sum.

Additional Benefits/Options

Terminal Illness Benefit

The Terminal Illness Benefit pays the Sum Insured (unless another amount is specified in the Policy Summary) when the Person Insured is diagnosed with a Terminal illness before the last 18 months of the end of the policy. This terminal illness is such that it is advanced or has rapidly progressed into a condition that is no longer curable and which will result in death do greater than twelve months after the date of the diagnosis. Once payment is made for this benefit, the cover will end.

For the benefit to be payable, the diagnosis and medical reports should be provided by countries in the European Union, as well as in Australia, Canada, Malta, New Zealand, Norway, Switzerland and the United States.

Repayment Guarantee

Applicable for a Decreasing Life Insurance plan, this will pay the outstanding loan/mortgage in the event that the life insurance coverage amount is less than the outstanding loan. This is payable when:

• The rate of interest used for the policy’s plan schedule is lower than that used for the loan and this caused the discrepancy between the amount of life insurance and the amount of loan outstanding.
• The rate of interest charged on the loan was lower than 10% at the start of the policy
• The loan still remains outstanding before the end of the policy’s term
• The outstanding loan when the policy started was not greater than the Sum Insured

Accident, Sickness and Unemployment

This helps provide mortgage payments when the Person Insured is unable to work for more than 30 days due to illness or injury (caused by an accident). It will also provide the same protection if the Person Insured becomes unemployed or has to leave work to become a carer (of a specified loved one).

The Person Insured can choose the type of coverage, which can be:

• Accident or sickness
• Accident, sickness and unemployment

For Aviva to provide the cover, the Person Insured should be:

• Between the ages of 18 and 64
• Is a resident of the United Kingdom, Channel Islands or the Isle of Man
• Has a mortgage and application to this cover occurs within the first 30 days after the mortgage agreement is completed
• Is currently paying or about to pay his mortgage
• Has stayed current with the monthly mortgage repayments
• Has been in a paid occupation, working not less than 16 hours a week for at least the last six months. The period can include statutory maternity or paternity leave and self-employed work but not temporary work

Benefit conditions:

• The maximum benefit payable is 150% of the monthly mortgage payment. This is to cover for the mortgage payments, as well as premiums for life, buildings and contents cover
• The maximum benefit should be no more than the lower or £1,500 monthly or 60% of the Person Insured’s monthly earned income
• The payment of monthly benefits is up to a maximum of 12 months
• The coverage has a waiting period of 30 days, where no payments are made within the waiting period
• For the benefit to be payable, the Insured Person has to enter into a Jobseeker’s Agreement or provide an alternative evidence acceptable to Aviva. For self-employed persons, Aviva will require proof that they have registered as unemployed with the Department for Work and Pensions as well as proof that they have involuntarily stopped their business due to the inability to earn enough income to meet all reasonable business and living expenses and have declared such to HM Revenue & Customs.

Benefit exclusions:

The plan will not cover illness or injury resulting from:

• Pre-existing medical conditions
• Pregnancy or childbirth
• Self-inflicted injuries
• Drug or alcohol abuse by the Insured Person
• Medically unnecessary procedures such as cosmetic surgery
• The Insured Person’s detention in prison, as directed by a court of law

The plan will not pay for unemployment:

• If the Insured Person voluntarily resigns, accepts redundancy, is retired or is dismissed for misconduct
• If the Insured Person has received notification of unemployment where it happened within the first 60 days of the benefit cover. This period is extended to 120 days if the benefit is arranged after the beginning of the mortgage.
• If there is an indication that the Insured Person knew he was about to become unemployed at the start of the plan (regardless of whether he has received an official notice or not)
• If the Insured Person becomes unemployed after temporary work
• If the unemployment is normal and expected (i.e. seasonal unemployment)
• If the Insured Person becomes unemployed as a result of the termination of a contract (except if that contract was for the same company for at least two years, the Insured Person sill has a contract with at least 12 months, the Insured Person was originally employed but was shifted into a fixed term contract by the employer)
• If the unemployment was due to the Insured Person’s deliberate actions or abuse of alcohol or drugs
• If the Insured Person was ordered imprisoned by a court of law

The plan will not pay for a carer claim:

• If the Person Insured already knew that he would opt to be a carer at the start of the plan
• If the Person Insured has applied for Carer’s Allowance or has already received notification that they will get Carer’s Allowance, within the first 60 days of the start of the plan. This term is further extended to 120 days if the cover was arranged after the start of the mortgage

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. For the benefit to be payable, the Person Insured must survive for at least 14 days from the date of the diagnosis. 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.

• Integrated. If the critical illness cover is taken out as an integrated cover to term assurance or mortgage life insurance, the amount of cover is the same as the life cover. Once the critical illness benefit is paid, the coverage stops.
• Independent. If the critical illness cover is taken as an independent option, any claims made for critical illness will not affect the life insurance cover.

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

• Alzheimer’s disease or pre-senile dementia (occurring before age 65)
• Aorta graft surgery
• Aplastic anaemia
• Bacterial meningitis
• Benign brain tumour
• Benign Spinal Cord tumour
• Blindness
• Cancer
• Cardiomyopathy
• Coma
• Coronary artery by-pass grafts
• Creutzfeldt-Jakob disease
• Deafness
• Encephalitis
• Heart attack
• Heart valve replacement or repair
• HIV infection (only when caught through covered circumstances and in accepted countries)
• Being in intensive care for 30 consecutive days
• Kidney Failure
• Liver failure
• Loss of hand or foot
• Loss of independent existence
• Loss of speech
• Major organ transplant
• Motor neurone disease
• Multiple sclerosis
• Multiple System Atrophy
• Paralysis of a limb
• Parkinson’s disease prior to age 65
• Pneumonectomy
• Primary Pulmonary Hypertension
• Progressive supranuclear palsy
• Pulmonary artery surgery
• Rheumatoid Arthritis
• Severe lung disease
• Stroke
• Structural heart surgery
• Systemic lupus erythematosus
• Third degree burns
• Total permanent disablement before age 65

Partial payments (the lower between £20,000 or 20% of the critical illness cover amount) will be made for diagnosis of the following:

• Carcinoma in Situ of the Breast
• Crohn’s disease
• Low grade prostate cancer
• Removal of an eyeball
• Significant visual impairment

For each of these illnesses, there is a limit of only one claim. Any claim for this will not affect subsequent claims for the critical illness cover.

Other cover details:

• Critical illness cover is only up to £2,000,000. Thus, if this is integrated into the life cover, the life cover will also be only up to £2,000,000.
• The claim for critical illness must be made within 26 weeks of diagnosis
• The claim for total permanent disablement must be made within 13 weeks of the start of the total and permanent disablement
• Claims for blindness, coma, deafness, loss of hand or foot, loss of independent existence, loss of speech, paralysis of a limb, third degree burns, total permanent disablement and traumatic head injury is not payable if it is caused by criminal acts, self-inflicted injury or injury due to alcohol or drug abuse.
• The Critical Illness benefit also automatically includes the children of the Person Insured. The cover is up to the lower of £25,000 or 50% of the main critical illness cover.

Income Protection

This pays out a monthly income in case the Person Insured is unable to work due to illness or accidental injury. The monthly income is computed based on a percentage of the Person Insured’s current income. This means that the Person Insured has been in a full time occupation prior to the disability.

The disability may be based on:

• The inability to perform duties in the Person Insured’s normal occupation
• The inability to perform duties of any occupation that the Person Insured is able to do based on his education, training or experience
• The inability to perform at least three of the following: sitting in a chair, standing, moving from chair to bed and vice versa, combined movement, walking, moving about the house and up and down the stairs, lifting and carrying, making use of the hands, bending and kneeling and maintain a driver’s license in the UK
• The presence of a serious condition, such as mental illness, terminal illness, complete loss of dependence, deafness or blindness

The benefit under the Income Protection benefit may be affected by other income that may have resulted from the Person Insured’s being disabled. This includes:

• Salaries or wages the employer continues to pay
• Continuing income from a business (if the Person Insured is employed)
• Insurance benefits aside from the one provided in the policy
• Disability benefits that are not provided as State benefits
• Pension payments

The monthly payments will stop if the Person Insured:

• Dies
• Is no longer disabled
• Is no longer unable to earn an income
• Has reached the maximum age for the plan
• Has become subject to a custodial sentence or is remanded in custody

Mortgage Payment Protection

This provides monthly payments to the mortgage if the Person Insured is unable to work due to illness or accidental injury. Premiums for this are reviewable – first, before the fifth anniversary of the plan, and annually thereafter. This is not available if the Premium Protection is selected.

Other details:

• The Mortgage Payment Protection benefit is only available for a maximum age of 54 at the start date. Other plans where the term continues past the 65^th birthday of the Person Insured is not eligible for Mortgage Payment Protection.
• For joint life insurance cover, the mortgage payment protection benefit can be made to apply for both lives or either one life.
• There are no limits as to the number of claims for Mortgage Payment Protection, regardless if the cause of the claim is the same.

The benefit to be paid out should not exceed:

• 50% of the gross monthly earnings of Person Insured (or of both lives if the policy is a joint life coverage)
• 150% of the mortgage payment

Aviva will stop paying this benefit when:

• The Person Insured dies,
• The Term of the Life Insurance cover ends
• The Person Insured is no longer incapacitated
• The Person Insured no longer suffers from a loss of earnings
• The Person Insured claims and is paid the Terminal Illness benefit or the Critical Illness benefit

Even if Mortgage Payment Protection benefits are not stopped, the amount being paid out may change to reflect the Person Insured’s changes in employment and income. Other factors that may affect the benefit payments include:

• Continued income from employer (i.e. dividends, sick pay, etc.) or from the business (if self employed)
• Pension payments (except for those that are supposed to be received if the Person Insured is still employed)
• Continued income as a result of the disablement (i.e. disablement benefits)
• Other insurance benefits (i.e. income protection benefits, credit card payment protection or loan protection)

Premium Protection/Waiver of Premium

This pays for the life insurance premiums in the event that the Person Insured becomes totally disabled due to illness or injury. Total disablement may be defined as one’s occupation or based on the personal capability assessment.

Benefit details:

• The Person Insured should be not more than 54 at the start of the plan.
• For the Insured Person to be eligible, he must be in paid employment prior to the disablement. Otherwise, the basis of the disablement would be the personal capability assessment definition.
• Premium Protection is not available for plans that continue to be in force even after the Person Insured has reached 70 years of age.
• This is not available if Mortgage payment protection is selected.
• The Person Insured can choose the deferred period. The deferred period is the waiting period from the start of the disablement before the benefit payments start. Term assurance has a six-month deferred period.

Definition of disablement:

• Own occupation. The Person Insured should no longer be able to do the tasks related to their normal occupation.
• Personal capability assessment. The Person insured is either in serious condition or no longer able to perform at least three of the tasks under personal capabilities.
  • Serious conditions. These include: complete dependency, blindness, deafness, mental illness or a terminal illness.
  • Personal capability. These tasks include: maintaining an ordinary UK driver’s license, combine movement, moving up and down the stairs, walking, standing, remaining seated in a chair, bending, kneeling and lifting and carrying.

Conversion Option

This provides the Person Insured with the option to convert the Term Coverage into another term assurance or whole of life coverage at any time without needing to provide further medical evidence.

Other details:

• The conversion option will only be applied once and done before the Person insured turns 65.
• This option is not available if Critical Illness is also included in the policy.
• When the conversion is applied, the new sum assured may be the same amount as the previous sum assured. It may also be increased based on the Retail Prices Index and how it will affect the previous sum assured from the start of the old policy.

Renewal Option

This allows the Person Insured to get a new plan when the term of the policy ends. He does not need to show any medical evidence. The rates used will be the rates at the time of the renewal.

Other details:

• Medical evidence will be required if the Person Insured opts to add critical illness or premium protection options to the plan being renewed.
• The Renewal option is not available when Critical Illness with guaranteed premiums cover is added to the policy.
• The new sum assured may be up to sum assured for the old policy. It can also be higher, but based on the Retail Prices Index applied from the start date to the date the renewal option is exercises.
• The new term policy must either be as long as the term of the old policy or shorter.
• The Person Insured can exercise the renewal option repeatedly, as long as the renewed policy does not overlap into his 65^th birthday.

Separation Option

This is for mortgage life insurance policies covering two people (i.e. spouses who have entered into a mortgage together). In the event that the two spouses separate, the two persons covered can take out two new policies without having  to show further medical evidence. The existing mortgage must then be named after one of the spouses, or the two take on a new mortgage.

Other details:

• The sum assured for the new plans should not exceed the sum assured provided for the old plan, at the time the separation option was exercised. This is important when the mortgage life insurance cover is a decreasing mortgage cover. The new policy can only take on the existing sum assured at the time.
• If a new mortgage is taken out, the new mortgage life cover should begin within three months from the date the mortgage is taken out.
• The separation option is not applicable for the mortgage payment protection (Waiver of Premium) benefit.
• The Person Insured cannot apply for another joint life plan with a new partner. Only he and the ex-spouse gets the two single life policies provided by the Separation Option.

Exclusions

The cover will not pay for a fatal accident caused by:

• Accidents occurring outside of “accepted” countries. Accepted countries include Europe, Canada, the United States, Australia and New Zealand.
• Engaging in specified hazardous pursuits
• Participation in a criminal act
• Participation in a war, riot or civil commotion
• Air travel/flying other than as a passenger of a commercially licensed aircraft
• Self-inflicted injuries
• Accidents due to alcohol or drug abuse

How to Make a Claim

When making a claim, Aviva will usually require the following:

• Completed claims form
• Death certificate
• Birth certificate of the life insured
• Proof that the claimant is indeed the one to which the benefit is to be paid
• Police reports/doctor’s reports, where applicable
• Other documents that will help Aviva properly assess the claim

The content of this article is provided for informational purposes only and is not created to be a financial advice. Contact Aviva (http://www.aviva.co.uk) directly for details about their offerings.
Updated on: 18.09.2012

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