Decreasing Critical Illness Extra
Pays out a lump sum in the event of death, earlier diagnosis of a terminal illness or meeting the definition of one of the named critical illnesses within the term of the plan. The sum assured reduces throughout the term at a rate chosen by the customer of 7%, 8%, 9% or 10% per annum.
This contract offers both guaranteed and reviewable premiums.
Where there is a need to protect a repayment mortgage with a policy that pays out the decreased lump sum of the policy in the event of death, terminal illness (if life expectancy less than 12 months) or critical illness.
Where a lump sum is required to:
- Cover the loss of a key person.
- Purchase the shares owned by a director or partner.
- Cover a business loan which decreases.
Suitable if customers
- Want to take advice on the suitability of the product
- Require a lump sum to cover a capital and interest mortgage that decreases by either a rate of 7%, 8%, 9% or 10%.
- Require a lump sum to cover a business loan that decreases by a rate of 7%, 8%, 9% or 10%.
- Need a decreasing sum to cover a mortgage in the event of death, terminal illness or specified critical illness and have dependants, and are not willing to self-insure or do not have funds elsewhere.
- Have a business need to cover the loss of a key person, to provide finances to purchase shares of a director or partner in the event of their death.
- Have medical conditions that do not prevent provisions of cover and are happy to be underwritten.
- Can afford relevant monthly premiums for the chosen policy and who are UK resident.
Unsuitable if customers
- Wish to purchase direct without advice
- Choose a mortgage interest rate that exceeds the chosen policy interest rate.
- Have an interest only mortgage, so there will not be sufficient cover to pay off the mortgage.
- Want their policy level to remain the same throughout the life of the policy.
- Do not need death, Terminal Illness and critical illness cover / without dependents and are willing to self-insure and have sufficient funds elsewhere.
- Do not have a business need to cover the loss of a key person, to provide finances to purchase shares of a director or partner in the event of their death.
- Want a product to pay a monthly benefit if unable to work for a period of time.
- Want a product to pay a benefit if unable to work for a period of time due to accident or injury (IPB)
- Have health conditions that may result in cover not being issued.
- Require a non-underwritten journey.
- Are unable to afford the chosen policy and are not UK resident.
Amount of Cover
- No minimum sum assured. Driven by minimum premium.
- Maximum sum assured:
£3 million - if Specific Work Tasks definition under TPD applies, or
£2 million - if Own Occupation definition under TPD applies.
- The amount of cover decreases roughly in line with the way a repayment mortgage reduces during the term of the policy.
- The minimum term allowed is 5 years (2 years if Life Insurance with Critical Illness Cover or Critical Illness Extra is chosen).
- The maximum term allowed is 40 years.
- The minimum age to take out a policy is 18. It is possible for a life of another policy to be taken out on a 17 year old by an adult with insurable interest. This policy can then be placed in an Absolute trust with the 17 year old as the beneficiary.
- The minimum age at the end of the policy is 29.
- The maximum age for buying a policy is 64.
- The policy must end by their 70th birthday.
- Payable monthly or annually by Direct Debit.
- Children's Critical Illness Extra (available for an additional cost)
- Legal & General GP24 Service (available for an additional cost on critical illness products purchased on/after 27 November 2017. Not available for business protection plans or if reviewable premiums are chosen.
- Immediate Cover
- Total and Permanent Disability
- Waiver of Premium (WOP)
Benefits automatically included
- For joint life policies, benefit is paid on the first critical illness claim or death, whichever occurs first.