Details of Friends Life’s Comprehensive Life Insurance Product Offerings

Friends Life is a new brand that is from a combination of the former Friends Provident (UK operations) and life assurance businesses acquired from AXA UK and Bupa. Friends Life’s Comprehensive Life Insurance Product offerings include:

• Term Cover (Level or Decreasing)
• Mortgage Protection Term Cover
• Renewable Term Cover
• Family Income Benefit Cover

Critical Illness can be added to these types of cover.

Quick Facts

Plan Details

Payment

The policy will pay out the Sum Insured when:

• The Person Insured dies
• The Person insured becomes totally and permanently disabled
• The Person Insured is diagnosed with a terminal illness before the last 12 months of the plan

The Sum Insured is payable only once.

For the Family Income Benefit type of cover, the benefit is paid as an annual income.

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. Premiums remain the same throughout the life of the policy, as long as no changes are made on the cover.  However, there may be increases if these are due to changes in taxation or legislation. There is also a plan fee included in the membership.
• Renewable. The premiums may increase or decrease at each renewal, but the Person Insured does not need to provide further medical evidence. The change in premiums will depend on the person’s age and the current premium rates. This will also reflect changes in taxation or legislation. A plan fee is also included.

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 12 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.

Accidental Death Benefit

This provides additional protection while the plan application is being processed and underwritten. Accidental death is defined as “death arising solely and directly from bodily injury caused by external, violent, visible means totally independent of any physical or mental illness or infirmity”. The benefit will pay the lower of:

• The Sum Insured on the plan application
• £500,000

Other details:

• The death should occur within 30 days of the accident.
• The cover will start when Friends Life receives the signed application and will end the earlier of:
  • 90 days
  • The date Friends Life accepts the application
  • The date Friends Life rejects or postpones the application
• The Person Insured should be below 55 years old
• The accidental death benefit will not be payable if:
  • The death is due to self-inflicted injuries or suicide
  • The person applying for the plan also has outstanding applications for the same or similar cover with other Life providers
  • If there is an existing accidental death benefit cover provided by Friends Life

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 or pre-senile dementia (occurring before age 65)
• Aorta graft surgery
• Aplastic anaemia
• Bacterial meningitis
• Benign brain tumour
• Benign Spinal Cord tumour
• Blindness
• Cancer (except for certain kinds of cancer)
• Cardiac arrest
• Cardiomyopathy
• Chronic rheumatoid arthritis
• Coma
• Coronary artery by-pass grafts
• Creutzfeldt-Jakob disease
• Deafness
• Dementia
• Heart attack
• Heart valve replacement or repair
• HIV infection (only when caught through covered circumstances and in accepted countries)
• Kidney Failure
• Liver failure
• Loss of hands or feet
• Loss of independence
• Loss of speech
• Major organ transplant
• Motor neurone disease
• Multiple sclerosis
• Open heart surgery
• Paralysis of limbs
• Parkinson’s disease
• Progressive supranuclear palsy
• Respiratory failure
• Severe Crohn’s disease
• Stroke
• Systemic lupus erythematosus
• Terminal illness
• Third degree burns
• Traumatic head injury
• Type 1 insulin dependent diabetes mellitus
• Total permanent disablement before age 65
• Ulcerative colitis

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

• Coronary angioplasty
• Low-grade prostate cancer

Additional partial payments (the lower between £12,500 and 12.5% of the critical illness cover amount) will be made for diagnosis of the following:

• Carcinoma in Situ of cervix uteri requiring hysterectomy
• Carcinoma in Situ of the urinary bladder
• Cerebral aneurysm – with surgical repair
• Cerebral arteriovenous malformation – with surgical repair
• Crohn’s Disease
• Ductal carcinoma in situ of the breast
• Non-malignant pituitary adenoma
• Removal of one or more lobe(s) of the lung

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 £25,000 or 25% of the Sum Insured, for covered children’s critical illnesses.
• Additional children’s Critical Illness cover:
  • Children’s intensive care benefit, requiring mechanical ventilation for 7 days
  • Child’s hydrocephalus
  • Carcinoma in Situ of cervix uteri requiring hysterectomy
  • Carcinoma in Situ of the urinary bladder
  • Cerebral aneurysm – with surgical repair
  • Cerebral arteriovenous malformation – with surgical repair
  • Crohn’s Disease
  • Ductal carcinoma in situ of the breast
  • Non-malignant pituitary adenoma
  • Removal of one or more lobe(s) of the lung
• Acceleration payment benefit for specified surgical treatments. Payment will be the lower of £25,000 or 25%. Friends Life will provide an advance payment if the Person Insured is placed on the NHS waiting list for any of the following:
  • Aorta graft surgery
  • Coronary artery by-pass grafts
  • Heart valve replacement or repair
  • Open heart surgery

Total Permanent Disability

This is an optional cover and will pay out the Sum Insured when the covered Person Insured meets the definition of total permanent disability as stated in the policy.

Total Permanent Disability can be defined as:

• Own Occupation. Inability to do tasks related to their own occupation. This is used for Persons Insured that are in paid occupation, the occupation that is written in the application and was the current occupation at the time the Person Insured become disabled.
• Suited definition. Inability to do tasks not just for their own occupation but for any other occupation for which they are reasonably suited, based on training, education and experience.
• Activities of daily work. The inability (due to mental or physical impairment) to perform at least three of the following: bending, communicating, dexterity, eyesight, lifting and mobility.

Other details:

• The cover ends when the plan terminates or when the covered Person Insured reaches his 65^th birthday, whichever is earlier.
• The disability must have continued for a minimum of six months for it to be considered total and permanent disability.

Premium Protection/Waiver of Premium

This waives the premiums when the Person Insured is incapacitated. The waiting period is three months.

Other details:

• The definition of incapacity may be based on
  • One’s own occupation (the inability to perform tasks related to one’s occupation)
  • Work tasks (the inability to perform at least four or more out of a list of daily activities of daily living, this definition is used for Persons Insured who are not in paid occupation). This includes daily activities such as shopping, cooking, housework, handling money, taking medicine and minding children.
• The waiver will end at the earliest of:
  • The Insured Person’s 65 years old
  • The Insured Person is no longer incapacitated, he is able to carry on any paid occupation
  • The termination of the plan
  • The termination of the Insured Person as a member

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

The purpose of this option is to ensure the value of the sum insured, given the prevailing rate of inflation. The Sum Insured or chosen benefit can increase based on the Retail Price Index (RPI) or Average Weekly Earnings. The increase can also be pegged at three or five percent on each plan anniversary. Upon each increase, the premiums will also change to reflect this. It should also be noted that the rate of premium increase will reflect the prevailing premium rates, if the premiums are not guaranteed. If premiums are guaranteed, the premium increase will be based on the rate of premium used at the start of the policy.

The Person Insured may refuse the Indexation Option. However, once this is canceled, there will be no more increase in the future.

Guaranteed Insurability Option

This option provides the opportunity to increase the amount of Sum Insured due to certain life events, without the need to provide further medical evidence. The allowable increase is the lower of £50,000 or 25% of the original sum insured, subject to a maximum of 100% or £125,000. For family income benefit, the allowable increase is the lower of 25% or £8,000 annually, subject to a maximum of £125,000 (calculated as the annual benefit multiplied by the remaining number of years in the plan).

Other details:

• Life events include:
  • marriage/entering into a civil partnership
  • divorce or separation, dissolution of a civil partnership
  • becoming a parent (by natural birth or adoption)
  • becoming a legal guardian
  • increase in mortgage
  • increase in salary
• Only one increase can be made for each life event.
• The option is available if it happens to the Person Insured and the application should be made within six months of the event
• The Person Insured covered by the option should be under 55 years old at the time the increase is requested for
• The option is not available for plans issued at above one and a half times the standard terms

Fracture Cover

This pays out a benefit if you suffer from a fracture. The maximum benefit amount provided for one fracture in any one year is £2,100. The payment depends on the kind of fracture sustained.

Other details:

• The claim must be made as soon as it is reasonably practical.
• The fracture must be comminuted, complicated, compound, depressed, greenstick, pathological and simple.
• If more than one fracture is caused by a single event, the highest benefit will be the one payable.
• Only one fracture during any 12 month period will be payable.

Replacement Cover

This is for joint life plans. The two Persons Insured has the option to take out a new plan, after one Person Insured dies or makes a claim that causes the policy to cease cover. The other Person Insured (the one that does not make the claim) has the option to get a new plan.

Other details:

• The sum assured for the new plans should not exceed the sum assured provided for the existing plan.
• The replacement cover may only be applied if the existing policy still has five years or more left in its term.
• The existing policy must be accepted at standard rates and the Person Insured applying for the Replacement plan is below 50 years old.
• The replacement cover must be applied for within three months after the payment of the claim that caused the existing policy to cease its cover.

Exclusions

The cover will not pay for claims where:

• The claim is not made within the time frame
• There is fraud or failure to disclose relevant information at the time of application or during a claim.
• If the cause of the claim is specifically excluded in the policy
• Injuries are self-inflicted (for total permanent disability)
• The terminal illness is diagnosed during the last 12 months of the plan
• The claimant fails to provide information related to the claim, this includes undergoing a medical examination in the UK
• For critical illness claims, the covered person fails to survive for 14 days after the day of the diagnosis

How to Make a Claim

When making a claim, Friends Life will usually require the following:

• Details of the Person Insured (name, birth certificate, etc.)
• Details of the person making the claim
• Details of the cause of the claim (i.e. medical records of the illness/disability or the original death certificate)
• Relevant dates
• The plan number/registration number

Friends Life may also require medical evidence provided by a medical practitioner working in an approved hospital.

The content of this article is provided for informational purposes only and is not created to be a financial advice. Contact Friends Life (http://www.friendslife.co.uk) directly for details about their offerings.
Updated on: 16.09.2012

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