Two-year renewable term assurance with
Living Care disability cover
Minimum sum assured/premium:
Life cover up to £100,000, index-linked disability benefit up to £5,000 a year upon failure of two ADLs, up to £10,000 a year upon failure of at least three ADLs
None for term assurance, six months for disability cover
Tel: 0870 160 5819
Universal Provident's lifeline plus combines term assurance with disability cover which is similar to a long-term care product. However, whereas LTC provides cover for the care of elderly people, lifeline plus provides an annual index-linked benefit if the policyholder
becomes disabled as a result of an accident or illness at any age.
Independent Personal Financial Management proprietor Luke Gibbon says: “The policy is underwritten by way of a two-year moratorium which is attractive in that it saves on medical information being required and avoids loading of premiums. However, I would expect greater medical evidence being required in the event of a claim.”
Gibbon points out that the policy is renewable every two years and the premiums will increase with age. He feels this is attractive in that it keeps costs low at the outset but is concerned that it might be expensive later on and may result in policyholders cancelling at the time a claim is more likely to be made.
Gibbon then focuses on the disability cover. He says: “The living care benefit is based on activities of daily living. Five per cent of the sum is paid out on being unable to perform two ADLs without specialised equipment and 10 per cent is paid on being unable to perform three or more ADLs.” Gibbon does not like these conditions. He adds: “No benefit is payable for the first six months. The cover is also substantially less that that provided by critical illness or income replacement policies. Also, at the age of 60, the sum assured will be reduced by 50 per cent and the living care benefit will be doubled.”
Rather than use this plan Gibbon would prefer a level term assurance plan plus an income replacement plan. He explains: “The income replacement plan would than pay an income if the client was unable to work and would cover many more situations than the ADL definition. While it is difficult to compare costs directly the indication is that the life plus income replacement policy would not be more expensive.”
Suitability to market: Average
Premium rates: Average
Adviser remuneration: Good