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Scottish Widows Protect
We’ll try and make our financial underwriting decisions immediately. To do this we’ll get as much information as we can through our online financial questions, including details of any existing cover and the specific reason for the new cover. This means that the majority of your cases will be processed straight through without the need for further evidence or a paper financial questionnaire.
Life Cover Sum Assured | Financial Evidence Requirements | Critical Illness Cover Sum Assured | Financial Evidence Requirements |
---|---|---|---|
Up to £1,000,000 | Nil | Up to £500,000 | Nil |
£1,000,001 to £3,500,000 | Simplified online underwriting* | £500,001 to £1,500,000 | Simplified online underwriting* |
Over £3,500,000 | Independent evidence - manual assessment | Over £1,500,000 | Independent evidence - manual assessment |
*We'll need a financial questionnaire completed if you submit a paper application for your client.
See our financial frequently asked questions
The maximum Life Cover we’ll allow is based on a specific multiple of your client's salary and the number of years to their retirement, with Critical Illness Cover based on half this calculation. We use age 70 as the normal retirement age.
Amount of cover = (70 - your client’s current age) x current salary.
For example if your client is 35 and earns £50,000 a year:
Life Cover and Life with Critical Illness Cover for mortgage purposes will be assessed directly against the mortgage amount. We won’t restrict the term of the cover to the term of the mortgage.
Life Cover for Inheritance Tax (IHT) should reflect the IHT liability of the person covered directly.
Please see www.hmrc.gov.uk/inheritancetax for the latest information on tax rates and allowances.
Life Cover and Life with Critical Illness Cover for business loans should be appropriate to the specific amount of the loan and the term. Consideration is also given to the number of people being covered. Where you’re applying for cover for multiple people within a business you should consider offering each person covered the appropriate split of the full loan amount.
Life Cover and Life with Critical Illness Cover for Key Person allows you to choose whether the sum assured should be based on multiples of the key person's income or loss of profits.
For example: net profit average = £600,000 x 5 = £3m. Key person drives 50% of the business profits; therefore the sum assured will be £1.5m.
Life Cover and Life with Critical Illness Cover will be calculated on a business valuation based on the net profit and assets and then an appropriate allowance will be assessed based on the client’s share percentage.
For example: net profit average = £800,000 x7 = £5.6m. If four shareholders hold 25% shareholding each, then the sum assured will be £1.4m per life assured (£5.6m / 4 = £1.4m).
The maximum for Relevant Life Cover will be based on multiples of the total remuneration of the life assured.
For example: if your client is 50 and earns £50,000 a year, this would be 75 - 50 = 25 x £50,000 = £1.25m Life Cover.
Sometimes we are unable to offer full Critical Illness Cover so it may be necessary to exclude core conditions or specific impairments.
There are 4 exclusions that would result in a reduction in the premium:
The premium reductions reflect the incidence of claim for that condition. Cancer is the most common reason for claiming under a critical illness policy and accounted for 65%* of all Critical Illness claims in 2016.
The actual reduction in premium will vary depending on the individual applicant.
An example would be: a female, non-smoker applying for Critical Illness Cover would receive a 30% premium discount if cancer is excluded as a core critical illness condition.
There are various exclusions that will not result in a reduction in premium and a few examples have been listed below:
The reason that a reduction is not given for these types of exclusions is due to the very low incidence of claims associated with these.
*Source: Scottish Widows, based on the number of critical illness claims paid out by Scottish Widows between January 2016 and December 2016.
We have two definitions of disability which apply to Total Permanent Disability and Premium Protection.
We want to offer an ‘Own Occupation’ definition to your clients in as many cases as possible.
To allow us to do this, certain types of occupation will have a small loading applied to Total Permanent Disability (TPD) only. This won’t be reflected in your initial quote and will only be advised once underwriting has been completed. This will not apply to the Premium Protection benefit.
Where we can’t offer Own Occupation, we’ll consider offering Activities of Daily Work (ADW). The definition of ADW means loss of the physical ability through illness or injury to perform at least 3 of the 6 work tasks listed in the key notes section below.
If your client has a high risk occupation we would exclude TPD from the core critical illness conditions and decline the premium protection benefit.
The table below highlights the different occupation risk categories and the definition of disability that would apply:
Description | Class | Definition | Examples |
---|---|---|---|
Professional/Administrative
|
Class 1 | Own | Accountant, actuary, admin clerk, architect, bank staff, civil servant, computer programmer, clerical assistant, estate agent, financial adviser, loss adjuster, office worker, receptionist, solicitor, systems analyst, underwriter. |
Limited manual content |
Class 2 | Own | Beautician, catering assistant, chef, doctor, hairdresser, photographer, psychiatrist, sales assistant, social worker, undertaker, waiter. |
Light manual occupations |
Class 3 | Own with small loading | Air traffic controller, baker, butcher, car mechanic, care worker, dentist, factory worker, housekeeper, nurse, plumber, postman, security guard, surgeon, teacher, tyre fitter, valeter, vet. |
Manual/Manufacturing |
Class 4 | ADW | Builder, bus driver, cleaner, fireman, HGV driver, joiner, machine operator, nursery nurse, paramedic, policeman, taxi driver, van driver, warehouse worker. |
Heavy Manual/Industrial |
Class 5 | Declined | Farm labourer, fruit picker, market trader, refuse collector, road sweeper, roofer, scaffolder, sports professional, steeplejack. |
Non-employed |
Class 6 | ADW | House persons, retired, student, unemployed, voluntary worker. |
To check your client's occupation to see if TPD and Premium Protection are available and the definition that would apply, use our definition of disability indicator tool
The relevant specialists must reasonably expect that the disability will last throughout your client’s life with no prospect of improvement, irrespective of when the cover ends or the person covered expects to retire. The person covered must need the help or supervision of another person and be unable to perform the task on their own, even with the use of special equipment routinely available to help and having taken any appropriate prescribed medication.
For the above definition, disabilities for which the relevant specialists cannot give a clear prognosis are not covered.
Your client's occupation plays an important role in our assessment of their application. Our underwriters look at a variety of factors which can have an impact on the terms we offer such as:
Your client's occupation will decide the definition of disability which applies to any Total Permanent Disability or Premium Protection cover included within the plan but this may change following medical underwriting.
To check your client's occupation to see if TPD and PP are available and the definition that would apply, use our definition of disability indicator tool
Residency and travel are important risk factors which may influence our acceptance terms.
*Please contact our underwriters to discuss these types of applications before you submit the application.
We’ll base our risk assessment on identifying considerable past travel to countries that have a high prevalence of HIV and Hepatitis. Any past travel to Africa, Thailand or the Caribbean for more than three months in the last five years will be referred to our underwriters for individual assessment. We’ll need to know which countries have been visited, which in turn may result in an HIV and/or a hepatitis test. Where a test is required, we can't offer terms before this.
We’ll base our risk assessment on identifying any future travel to countries that are deemed high risk. High risk is determined by general political, social and economic infrastructure, together with the specific risks presented by crime, kidnapping, terrorism, accident and the quality and availability of medical services. Most cases will need to be assessed on an individual basis.
We’ll apply an additional premium for Life Cover for any of your clients who answer ‘yes’ to the following:
The additional premium reflects the increased accident risk as:
Further information can be found on the Department for Transport website (PDF)*
For your clients who work in the Armed Forces, which includes the Territorial Army (TA) and Reservists, these are the details of our current position:
*There won’t be any payment made under Critical Illness Cover for any claim arising as a result of any event occurring while the person covered is undertaking duties on behalf of, or during service with, the British Armed Forces or any other militia in an active theatre of operations or conflict. This exclusion applies for the length of the cover.
There are some conditions that we’ll apply a sum assured restriction to if your client has suffered from them.
These are:
We’ve chosen these conditions due to their high decline rates. When these medical conditions are disclosed, our automated underwriting system will only continue with questioning where the sum assured for Life Cover or Critical Illness Cover is £250,000 or over.