A Closer Look at Lloyds Life and Critical Illness Insurance Products

Lloyds carries three life insurance products:

• Lifetime Cover
• Term Cover
• Critical Illness with Life Cover

Why Go with Lloyds?

Here are some reasons to go with Lloyds:

• Wide range of Financial Products. Life insurance products are just a part of Lloyds financial product offerings. Going with Lloyds simplifies transactions covering your personal banking needs, such as loans, mortgages, credit cards and savings and current accounts. You only have to deal with one company for all of the transactions related to these.
• Flexibility. Lloyds life insurance products allow you to make changes midway into the policy. You can add another life to the cover, increase or decrease the term, increase or decrease the amount of cover.

Quick Facts

Plan Details

Payment of Sum Insured. The Sum Insured is payable upon the Person Insured’s

• Death
• Diagnosis of terminal illness (only for term cover)
• Diagnosis of critical illness (if critical illness is included)

The payments will only be made if death or illness occurs within the plan term and as long as the policy remains in force.

Sum Insured. The Sum insured can be level, increasing or decreasing.

• Level. The Sum Insured remains the same for the rest of the term.
• Increasing. This is designed to ensure that the Sum Insured keeps up with inflation and will be roughly an equivalent value with inflation considered. The annual increases are made every policy anniversary and are based on the Retail Price Index (RPI). The increases should not be below 2% and not above 10%. Each increase will be approved by the Person Insured since the increase in Sum Insured will also result in an increase in premiums. The Person Insured can refuse the increase but once he does, there will be no more automatic increases in the future.
• Decreasing. The Sum Insured steadily decreases at a rate of 10% annually. This may mean that there won’t be enough life cover if the interest rate applied on the mortgage is more than 10% or if the mortgage term is extended.

Premiums. Premiums for term cover can either be guaranteed or reviewable.

• Guaranteed. The premiums are guaranteed to remain the same throughout the life of the policy.
• Reviewable. The premiums will be reviewed every five years and may be increased, decreased or remain the same. The review may result in an increase of premiums due to changes in morbidity and mortality rates or past claims experience.

Additional Benefits/Options

Critical illness Cover. If the Person Insured becomes diagnosed with a covered critical illness, he can claim for the Sum Insured to help pay for medical costs. Once the critical illness claim is paid, the cover stops and there will be no more payments for the death benefit.

The critical illnesses included are:

• Alzheimer’s disease
• Aorta graft surgery
• Bacterial meningitis
• Benign brain tumour
• Blindness
• Bone marrow failure
• Cancer
• Coma
• Coronary artery by-pass grafts
• Creutzfeldt-Jakob disease
• Deafness
• Heart attack
• Heart valve replacement or repair
• HIV infection
• Kidney Failure
• Loss of hands or feet
• Loss of speech
• Major organ transplant
• Motor neurone disease
• Multiple sclerosis
• Paralysis of limbs
• Parkinson’s disease
• Progressive supranuclear palsy
• Stroke
• Third degree burns
• Total permanent disablement
• Traumatic head injury

Other details:

Children’s critical illness. The Person Insured’s children (natural, by legal adoption or stepchildren) are automatically covered if they are aged 6 months to 21 years at the time the policy is in force. The cover is for the lesser of £25,000 or 50% of the Sum Insured if a child is diagnosed with a covered critical illness.

Terminal illness cover. This pays out the Sum Insured if the Person Insured is terminally ill, where his illness is in an advanced stage and the Person Insured is not expect to survive the illness for over 12 months.

• This is not payable if the claim is given within the last 12 months of the cover term.
• Once payment for terminal illness is given, the cover stops and no more claims will be payable.

Waiver of Premiums. The benefit means that the Person Insured no longer has to pay the premiums if he has become disabled.

Other details:

• This option is not available on the Lifetime Cover for less than £15,001 Sum Insured.
• From the date the disablement is diagnosed, the Person Insured must still continue to pay for the premiums for the next 26 weeks. The benefit will start after this waiting period.
• The definition used for incapacity may be:
  • Own Occupation
  • Suited Occupation
  • Activities of Daily work
• Once selected and added into the plan, this benefit can no longer be removed from the cover.
• The benefit payments will stop at the earliest of:
  • The Person Insured’s recover so that he is able to return to work
  • The Person Insured reaching 66 years old
  • The end of the policy term
• Exclusions:
  • Drug or alcohol abuse, including overdose of lawfully prescribed drugs
  • Participation in criminal acts
  • Self-inflicted
  • Unreasonable failure to follow medical advice
  • War and civil commotion

Free life cover. After the Person Insured has applied for his policy and before that policy is issued, there is a free life cover benefit. This can be the 90 Day’s Mortgage Free Cover if the cover is bought to protect a mortgage or the 30 Days’ Free Accidental Death Cover for other term life insurance cover.

Other details:

• Benefit amount: This is equivalent to the amount of Sum Insured being applied for or £250,000, whichever is lower.
• Maximum age: This is not available to those 60 and above.
• 90 Days’ Mortgage Free Cover: The cover is for 90 days from the time the Person Insured submits his application and direct debit instruction up to the time:
  • The policy is issued
  • A death claim is made
  • 90 days
  • The date the application is declined
• 30 Day’s Free Accidental Death Cover: The cover is for 90 days from the time the Person Insured submits his application and direct debit instruction up to the time:
  • The policy is issued
  • A death claim is made
  • 30 days
  • The date the application is declined

How to make a claim

Claims are made and payments are received by:

Death claims: Beneficiaries

Critical illness claims: Person Insured or owner of the policy (if these are different)

Waiver of Premiums claims: Premiums paid out directly to the company

Documents that may be required include:

• Policy contract
• Claims form
• Medical reports
• Death and birth certificate of the Person Insured
• Marriage certificate or birth certificate of beneficiaries (if spouse and children of Person Insured, respectively)

Time limits:

• Critical Illness – Claims should be made within 6 months from the date of diagnosis.
• Terminal illness – Claim should be made at least 1 year before the date the cover ends.
• Waiver of Premium – Claim should be made within 13 weeks of the disability.

The content of this article is provided for informational purposes only and is not created to be a financial advice. Contact Lloyds directly for details about their offerings.
Updated on: 09.06.2013

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