Overview of Liverpool Victoria Friendly Society Limited’s (LV=) Life Insurance Products

Liverpool Victoria Friendly Society Limited’s (LV=) range of life insurance products include:

• Life insurance
• Life with critical illness
• Over 50s life insurance
• Mortgage Life Insurance

Other products under their Life Cover product line include:

• Mortgage payment protection
• Income protection

These products can be included in the Flexible Protection Plan.

Quick Facts

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.

Types of Cover

• Level cover. The sum insured remains the same throughout the life of the policy.
• Decreasing cover. The sum insured is decreased in such a way that it coincides with the decreasing amount of mortgage or loan, if the policy is bought to cover this loan. Premiums stay fixed. The cover will pay for the outstanding mortgage upon the death or diagnosis of terminal illness of the Person Insured. These conditions apply:
  • The mortgage was taken no later than 3 months after the policy has started
  • The mortgage payments are up-to-date
  • The length of the mortgage and the policy are the same
  • The outstanding mortgage is not more than what it should be had the mortgage been the same amount at the policy start date and 12% interest rate is applied compounded annually.
  • If the sum insured at the start of the policy is less than the amount of mortgage, the policy will only pay for the proportionate amount decreased.
  • Mortgage repayment arrears are not payable under the policy.
• Inflation-lined cover. The sum insured and the premiums increase to keep up with inflation. This can either be index-linked or increasing. The increase will be applied for each plan anniversary. The Person Insured reserves the right to keep the premiums the same (and lower the Sum Insured) or pay the increased premiums. If the Person Insured has refused the sum insured increase and changes his mind later on, he has to apply for inflation-linked cover again. LV= will evaluate the application based on the Person Insured’s health and circumstances at the time of the re-application.

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 either be guaranteed or reviewable.

• Guaranteed. The premiums remain the same for the life of the policy, for as long as the benefit amounts remain the same.
• Reviewable. The premiums can change after a review is made. The first review is made after the fifth year from the date the policy is issued. Periodic premium reviews will be made each year after that.

Waiting Period

Some benefits require a waiting period. The Person Insured can choose the waiting period at the start of the policy.

For Life Insurance:

Level Cover

The amount of cover and premiums remain the same throughout the life of the policy. This can also be applied to the Mortgage Payment Protection benefit and the Living Expenses Protection Benefit.

Inflation-Linked Cover

The amount of cover and the premiums to be paid increase based on the rate of inflation. This is for the Living Expenses Protection Benefit.

Additional Benefits/Options

Terminal Illness Benefit

The Terminal Illness Benefit pays the claim (unless another amount is specified in the Policy Summary) when the Person Insured is diagnosed with a Terminal illness. These conditions apply:

• For the claim to be payable, the diagnosis should be made before the last 12 months before the policy ends.
• The critical illness must be diagnosed by a doctor who practices in a country that is included in the list of approved countries by LV=.
• This is for the LV Life Insurance product. The terminal illness product will be 3% less of the sum insured.

Guaranteed Increase Options

The Person Insured has the option to increase the Sum Insured of the policy for certain life events that happen to him. The availability of this option is stated in the policy schedule under “Special Provisions”.  The increase in Sum Insured is applicable without the Person Insured needing to provide additional medical evidence.

Other details:

• Maximum increase is capped at £150,000.
• The maximum age at the time of the increase is 54.
• Premiums will also increase to reflect the increase in sum insured.

Mortgage Extension

The Person Insured can extend the policy’s term or, replace it with a new cover, if:

• the repayment term of a mortgage is extended
• he takes out a new mortgage where the repayment date is more than one year later than the policy’s end date

The new policy can be issued if:

• the new policy’s sum insured is the same or less than as the sum insured of the current policy
• the new policy’s sum insured is also the same or less than the amount of outstanding mortgage
• the policy ends no later than the mortgage’s repayment date
• the policy ends before the Person Insured turns 70

The maximum age of the Person Insured at the time of the extension is 54. Premiums will also increase to reflect the increase in sum insured.

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 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.

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

• Alzheimer’s disease
• Aorta graft surgery
• Aplastic anaemia
• Bacterial meningitis
• Benign brain tumour
• Benign intramedullary spinal cord tumour
• Blindness
• Cancer
• Cardiomyopathy
• Coma
• Coronary artery bypass grafts
• Creutzfeldt-Jakob disease
• Deafness
• Dementia (including senile dementia)
• Encephalitis
• 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 independent existence
• Loss of speech
• Major organ transplant
• Motor neurone disease
• Multiple sclerosis
• Multiple System Atrophy
• Open heart surgery
• Paralysis of a limb
• Parkinson’s disease
• Primary Pulmonary Hypertension
• Progressive supranuclear palsy
• Pulmonary artery surgery
• Severe lung disease
• Stroke
• Surgical removal of an eyeball
• Systemic lupus erythematosus
• Terminal illness
• Third degree burns
• Traumatic head injury
• Total permanent disablement (if this is included in the cover)

Partial payments (the lower between £25,000 and 25% of the critical illness cover amount) will be made for diagnosis of prostate cancer or if the Person Insured undergoes Coronary artery angioplasty.

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

• Ductal carcinoma in Situ of the Breast
• Operation involving the removal of one or more lobes of the lung
• Partial loss of sight
• Severe Crohn’s disease
• Severe ulcerative colitis

Payment of these partial benefits will not affect the full amount of cover. This means you can still claim for a “major” critical illness included in the list. If a critical illness meets both the definition of a full payment and a partial payment, the policy will pay only for the full payment.

Other cover details:

• Once full payment of the benefit is made, the policy terminates. The Person Insured can no longer claim for the death benefit under the policy. The exception to this is when the life cover of the policy is higher than the critical illness cover. The policy will continue but will pay out only up to the remaining sum insured for the life cover, if the Person Insured dies within the policy’s effective date.
• The cover will not pay for pre-existing conditions.
• The diagnosis of the critical illness is made by a doctor who is practicing in a country that is included in the list of approved countries. If the diagnosis is made in a country that is not in the list, the Person Insured should go and get a diagnosis or have an operation from an “approved” country.
• Note: partial payments are made only once for any one disease that is listed under than partial payment.
• For the benefit to be payable, the Person Insured must survive for at least 14 days from the date of the diagnosis.
• Children’s cover. This is free cover that will pay out the lower of £25,000 or half of the main Critical Illness Cover if a child of the Person Insured is diagnosed with a critical illness.

Premium Protection/Waiver of Premium

This pays for the life insurance premiums in the event that the Person Insured cannot earn an income due to sickness or accident.  

Definition of disablement:

• Own occupation. The Person Insured can no longer perform the tasks related to their normal occupation.
• Work tasks. The Person Insured can no longer perform three or more everyday activities specified. Work tasks include: walking, climbing, lifting, bending, getting in and out of a car and writing.

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 file a divorce or dissolution of a civil union, the existing policy can be replaced with a new policy.

Other details:

• The new mortgage is under the name of either person in the joint life policy.
• The spouse or partner in the civil union takes on a new mortgage.
• The new sum insured amount is less than or equal to the sum insured of the original policy.
• The premiums will be based on the Person Insured’s particular situation/age at the time the new policy is issued.
• Premiums will also increase to reflect the increase in sum insured.

Buyback Life Cover Option

For life with critical illness, single life cover, the policy ends once a full claim for critical illness is paid. However, with this option, the Person Insured can take out a new Life Insurance policy after a year a critical illness claim is paid. The life insurance policy is issued without the Person Insured providing additional medical information. This option is added at the time of the policy application. Once the policy is issued, it can no longer be added.

Exclusions

The cover may not pay a death/terminal illness claim:

• If the terminal illness claim occurred in the last 12 months of the policy
• If the Person Insured practiced fraud or deliberately kept relevant information during the application, claims or reinstatement after the policy has lapsed

The cover may not pay a critical illness claim:

• If the critical illness is not included in the list or does not meet the definition provided in the policy
•  if the critical illness existed before the policy becomes in force
• For self-inflicted injuries
• For critical illnesses caused by alcohol, solvent or drug abuse
• If the Person Insured or child failed to follow reasonable medical advice
• If the Person being claimed for fails to survive at least 14 days from the date of diagnosis

How to Make a Claim

For death claims, the money will go:

• to the Person Insured’s estate, for a single life plan
• To the trustees, for a single life plan where the insurance benefits are put in trust
• To the plan owners, if this is different than the Person Insured or the Person Insured has signed the plan away to another owner
• To the surviving plan owner, for a joint life cover.

For joint life cover where the two Persons Insured dies at the same time, only one benefit will be paid. The older Person Insured is assumed to have died first.

For terminal illness claims, the money will go:

• To the Person Insured, if he is the plan owner
• To the trustees, for a single life plan where the insurance benefits are put in trust
• To the plan owners, if this is different than the Person Insured or the Person Insured has signed the plan away to another owner

When making a death claim, LV= will usually require the following:

• Original death certificate
• Completed claims form
• Birth certificate of the Person Insured
• Proof that the claimant is indeed the one to which the benefit is to be paid
• Trust deed, if the policy is put in trust
• Other documents that will help LV= properly assess the claim

When making a terminal illness claim, LV= will usually require the following:

• An examination by their own approved doctor
• Doctors reports and tests

LV= will cover reasonable costs of medical reports and other evidence they requested.

When evaluating a medical claim where diagnosis by a doctor is required, the doctor should be one that is practicing in the following countries: These countries are: Australia, Austria, Belgium, Bulgaria, Canada, Channel Islands, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, UK or USA.

The content of this article is provided for informational purposes only and is not created to be a financial advice. Contact Liverpool Victoria (http://www.lv.com) directly for details about their offerings.
Updated on: 13.09.2012

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