Bright Grey's (now RoyalLondon) Life Insurance Cover Options Through the Personal Protection Menu

Bright Grey’s (now Royal London) Personal Protection Menu provides life insurance cover, as well as critical illness cover, a combination of both, or income protection cover. This provides flexibility for the customer, as he only adds the type of cover that he needs.

This article will be mostly about the life insurance cover and other related benefits.

Quick Facts

Plan Details

Payment

The policy will pay out the Sum Insured when:

• The Person Insured dies
• The Person insured becomes critically ill (for Life or Critical Illness Cover)
• The Person Insured is diagnosed with a terminal illness before the last 12 months of the plan

The Sum Insured is payable only once.

The Person Insured has the option to either get the claim as a lump sum or as a monthly benefit (which is paid until the end of the term of the cover). For those that opt for a monthly benefit and later change his mind, the monthly payments can be converted into a lump sum. For Life or Critical Illness where premiums are guaranteed, the only available choice would be the lump sum.

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 guaranteed or renewable.

• Guaranteed. The premium rates applied will not change during the cover period.
• Reviewable. The premiums may increase or decrease at each review. The review will be on the 5^th year, and on each year after.

Additional Benefits/Options

Terminal Illness Benefit

The Terminal Illness Benefit either pays a lump sum or a monthly income when the Person Insured is diagnosed with a critical illness before the cover ends and before the Person Insured’s death. Once this is paid out, the cover stops and no further payments will be made for the death of the Person Insured.

Other details:

The Terminal Illness Benefit is only payable if the diagnosis of a terminal illness is made before the last 12 months before the date the cover ends.

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 Cover will pay if the Person Insured is diagnosed with:

• Alzheimer’s disease
• Aorta graft surgery
• Aplastic anaemia
• Bacterial meningitis
• Benign brain tumour
• Blindness
• Cancer (except for certain kinds of cancer)
• Cardiomyopathy
• Chronic lung disease
• Coma
• Coronary artery bypass 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)
• Intensive Care (being placed in the ICU for 10 consecutive days due to the need for mechanical ventilation)
• Kidney Failure
• Liver failure
• Loss of hands or feet
• Loss of independent existence
• Loss of speech
• Major organ transplant
• Motor neurone disease
• Multiple sclerosis
• Multiple system atrophy
• Open heart surgery
• Paralysis of limbs
• Parkinson’s disease
• Pneumonectomy
• Pre-senile dementia
• Primary pulmonary hypertension
• Progressive supranuclear palsy
• Pulmonary artery graft surgery
• Stroke
• Systemic lupus erythematosus
• Third degree burns (at least 20% of the body’s surface area or 50% loss of surface area of the face)
• Traumatic head injury
• Total permanent disablement

Additional partial payment (the lower of £15,000 or 20% or the Sum Insured) will be made for diagnosis of the following:

• Hospitalization for at least 28 consecutive days due to accident
• Ductal carcinoma in situ
• Low grade prostate cancer
• Third degree burns (at least 20% of the body’s surface area or 50% loss of surface area of the face)

Payments for the above will not affect the main benefit (critical illness or life).

Total permanent disability is included in the Critical Illness cover. Payment for this depends on the type of definition use:

• Working tasks definition. This pertains to disability due to illness or injury such that you are permanently unable to do at least 2 out of 6 working tasks of the following: walking, lifting, writing (using a pen), pencil or keyboard, hearing, speech, vision.
• Living tasks definition. This pertains to disability due to illness or injury such that you are permanently unable to do at least 3 out of the 6 living tasks of the following: washing, dressing, transferring, mobility, continence and feeding. This definition is used for claims on or after the Person Insured’s 65^th birthday.

Other cover details:

Children’s Critical Illness cover. This is automatic cover provided to a Person Insured’s children between 30 days to 18 years of age, whether these children are natural children or adopted children. The benefit will be the lower of £20,000 or 50% of the Sum Insured, for covered children’s critical illnesses. Payments of a child critical illness cover will not affect the main benefit.

Income Cover for Sickness

This benefit pays out a monthly income if the Person Insured is unable to work due to illness or injury. This length of the cover is between 5 to 40 years. The benefit payments will start after the waiting period, which is set at the beginning of the cover. Payment for this depends on the kind of definition used.

• Own occupation definition. This pertains to incapacity to perform essential duties related to one’s own occupation due to illness or injury.
• Working tasks definition. As defined above.

Other details:

• Deductions will apply for any benefits/income earned while this cover pays out the benefit. The reason is that insurance is meant to bring the Person Insured to his current level of income immediately prior to the illness and injury. Deductions will be made for:
  • Benefit payments from similar plans from other insurance companies or from Bright Grey
  • Benefit payments/earnings paid out by the employer or proceeds from self-employment
  • Payments from pension arrangements
• For those employed, the cover is up to 50% of pre-tax earnings, but not more than £12,500 monthly, or £150,000 for all benefit payments.
• For those who are self-employed, on a fixed-term contract or in part-time employment, the limit is up to £1,400 monthly, or £150,000 for all benefit payments.
• Payments will stop after the earlier of the following:
  • The Person Insured’s death
  • The Person Insured is no longer incapacitated and is able to go back to work
  • The Person Insured no longer meets the criteria for eligibility of income cover for sickness
  • The term of the payment period has ended
• For those who have gone back to work but are earning less, the benefit will still pay, but reduced based on pro-rated earnings.

Premium Protection/Waiver of Premium

This waives the premiums when the Person Insured is incapacitated. The waiting period is set at the time this cover is taken out. The term for this cover is 1 to 40 years.  This is automatically included in the cover if the Person Insured takes out Income Cover for Sickness. The circumstances by which this is payable is the same as Income Cover for Sickness, provided the claim is made prior to the Person Insured’s 65^th birthday.

Life Cover Reinstatement Option

This is for Life or Critical Illness cover. Once the Sum Insured is paid out for Critical Illness, the cover stops and no further payments will be made. However, this option, which is taken out for an extra payment, enables the Person Insured to get a new life cover without the need to provide additional medical evidence.

Other details:

• This is only available for reviewable premium plans.
• The new Life Cover’s Sum Insured should be no more than the amount of the original policy and no more than £500,000.
• The new Life cover should be of the same type and the same amount as the original policy.
• The length of the replacement cover will be no more than the length of the remaining term of the original cover. If the remaining time left in the original policy is less than the minimum, the option will no longer be available.

Replacement Cover

Also referred to as Joint Life Reinstatement Option, this is for joint life policies. If one Person Insured claims for the full sum insured, the policy terminates and no further payments will be made for other claims. However, with this option, the remaining Person Insured has the option to take out a replacement policy.

Other details:

• The replacement cover should be of the same type and the same amount as the original policy.
• The policy will be issued depending on the health questions provided upon application for the replacement cover.
• The Sum Insured for the replacement cover will be no more than the Sum Insured of the original policy.
• The length of the replacement cover will be no more than the length of the remaining term of the original cover. If the remaining time left in the original policy is less than the minimum, the option will no longer be available.
• The replacement cover should be applied for within 3 months from the day the clam that terminated the policy is paid.
• This option will be applicable only once.

Separation Option

This is automatically provided for joint life policies taken out to cover a mortgage. When the persons insured divorces or dissolves a civil union, this will affect the existing mortgage that is placed in both names. This option allows the two Persons Insured to take out single life covers for each. This is available within three months when:

• The mortgage is rearranged so that it is in the name of one Person Insured only
• Both or either of the Person Insured takes on a new mortgage on a new house

Other details:

• The new policy should be of the same type and the same amount as the original policy.
• The new policy will be issued depending on the health questions provided upon application.
• The new policy will be no more than the amount of the original cover

Renewal Option

This allows the Person Insured to get renew the plan without the need to provide additional medical evidence of insurability. Every renewal date, the terms of the renewal will be provided and the Person can opt to renew the policy.

Indexation Option

This provides automatic increases to the Sum Insured to allow for inflation. The rate of increase can be:

• Based on the changes in the retail price index (up to 10%)
• Fixed rate between 2% and 5%

Other details:

• Increases are annual and are made on every plan anniversary.
• Premiums will also increase.
• The rate of increase for the premiums is based on the amount of increase, the Person Insured’s age and how many years are left in the cover.
• Increases will be subject to maximum amounts:
  • Life cover: £15,000,000
  • Life or Critical Illness cover: £3,000,000

This includes any other current cover amounts from Bright Grey. Covers payable as regular payments will be computed based on what Bright Grey would have paid if it was paid as a lump sum.

Guaranteed Insurability Option

This option provides the opportunity to increase the amount of Sum Insured due to certain life events, without needing to provide additional medical evidence of insurability.

Other details:

Life events and allowable increases:

The total amount of increase should be the lower of:

• 50% of the original sum insured
• £125,000 (for lump sum)
• £8,000 annually (for regular payments)

The limit applies for all covers with Bright Grey.

• The person covered must be under 55 years old at the time an increase is applied for.
• The increase will be based on the terms and conditions offered at the time of the approval of the application.
• The length of the cover provided by the increase will not be more than the remaining term of the original policy
• The increase must be applied within 3 months of the life event.
• Further financial evidence (of the event) may be required.
• Increases cannot be made if
  • there are currently benefits being paid out
  • a claim is being reviewed
  • the application for increase is made within 12 months from the time a claim is paid or the time the Person Insured is incapacitated

Mortgage Repayment Guarantee

This ensures that the outstanding mortgage is paid off.

Instant Cover

This provides immediate cover once Bright Grey receives the application, either by post or by the internet. This does not cover Children’s Critical Illness or additional benefits in the Critical Illness cover.

Other details:

• This cover is plans taken out for the purpose of covering a house purchase, a mortgage or a remortgage (with a higher amount than the previous mortgage).
• It is only available if the person applying answers “no” to the health section questions in the application
• It is only available for those who can be issued the policy on standard terms.
• For a re-mortgage, this is only available if the plan starts at the date the lender releases the funds for the mortgage.
• Cover limits:
  • £300,000 for Life Cover lump sum
  • £9,000 annually for Live cover monthly payments
  • £125,000 for Life or Critical Illness lump sum
  • £5,000 annually for Life or Critical Illness cover monthly payments
• The cover is up to the amount of the mortgage, subject to the above limits.
• For re-mortgages, the cover is only up to the amount of the mortgage increase
• Instant cover will stop at the earlier of:
  • Four months from the time it starts
  • When the plan is issued, denied or cancelled (by the applicant)
  • When the company does not receive medical or financial information it requested within four weeks
  • Completion of the property purchase

Exclusions

The cover will not pay for claims where:

• The Person Insured or the claimant provides Bright Grey (now Royal London) with fraudulent, inaccurate or incomplete information.
• Exclusions offered for policies issued in non-standard terms
• If the definition for terminal illness is not met, or is met but the diagnosis is made within 12 months prior to the end of the cover
• There is self-inflicted injury
• Critical Illness claims is the Person Insured dies within 14 days of the diagnosis
• Critical illness and other benefit claims
  • where the Person Insured is not living in the UK or in approved countries
  • where the diagnosis of the illness does not meet the definition
• Children’s Critical Illness if the illness if pre-existing (before the cover started)  or present at birth

How to Make a Claim

When making a claim, Bright Grey will usually require the following:

• Details of the Person Insured (name, birth certificate, death certificate, etc.)
• Details of the person making the claim (name, proof of the claimant’s relationship to the Person Insured)
• Details of the cause of the claim (i.e. medical records of the illness/disability or the original death certificate). Medical diagnoses must be confirmed by Bright Grey’s chief medical officer.
• Relevant dates
• The plan number/registration number
• Other relevant information (evidence of the mortgage and its details, evidence of income, etc.)

Bright Grey may also require medical evidence provided by a medical practitioner working in an approved hospital.

Approved countries include:

• The UK
• Australia
• Austria
• Belgium
• Canada
• Channel Islands
• Cyprus
• Czech Republic
• Denmark
• Estonia
• Finland
• France
• Germany
• Gibraltar
• Greece
• Hong Kong
• Hungary
• Iceland
• Ireland
• Isle of Man
• Italy
• Japan
• Latvia
• Lithuania
• Luxembourg
• Malta
• The Netherlands
• New Zealand
• Norway
• Poland
• Portugal
• Slovakia
• Slovenia
• Spain
• Sweden
• Switzerland
• The USA

The content of this article is provided for informational purposes only and is not created to be a financial advice. Contact Bright Grey (now Royal London - https://www.royallondon.com/contact/looking-for/bright-grey-policy/ ) directly for details about their offerings.
Updated on: 17.09.2012

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