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Insurers: Aviva, Legal & General, Liverpool Victoria, Scottish Widows, Vitality, Zurich

In-Depth Overview of Scottish Provident’s Critical Illness Cover

Scottish Provident’s Critical Illness Benefit is added to various cover packages. This article will focus on the benefits provided under the Critical Illness Cover.

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Quick Facts on Scottish Provident Critical Illness

Availability Scottish Provident’s Critical Illness

  • Offered as one of the main benefits in various cover packages from Scottish Provident. This includes:
    • Pegasus Personal Assurance Plan Ultimate Cover
    • Pegasus Business Assurance Plan Ultimate Cover
    • Self Assurance Mortgage Term Plan
    • Self Assurance Personal Term Plan
  • With Pegasus Ultimate Cover, the critical illness cover comes with:
    • Total Permanent Disability Cover
    • Terminal Illness Cover
    • Life Cover (Optional)
    • Child Cover
  • Self Assurance plans provide the client with flexibility to include desired benefits into his individualized plan.

This can either be for a single or joint coverage.

Payment of critical illness benefit

  • Pays out a lump sum when the person insured is diagnosed with a covered critical illness.
  • Diagnosis of a children’s critical illness for the child of the person covered (payout will be a specified portion of the benefit amount)

The cover stops once the benefit amount or sum assured is paid out in full.

Condition for payout

  • The lump sum is paid upon diagnosis of a covered critical illness and the person insured survives for at least 14 days after the diagnosis.

Amount of cover

For Pegasus:

  • There is no minimum sum insured.
  • Maximum Sum Insured
    • £1.5 million (Personal Assurance Plan)
    • £2,000,000 (Business Assurance Plan)

For Self-Assurance plans

  • There is no minimum sum insured.
  • Maximum Sum Insured
    • £2,000,000 (Personal Term and Mortgage Term plans)
    • £3,000,000 (Business Term plan)

For the child critical illness cover: 50% of the sum insured or £20,000, whichever is lower

Age and other restrictions

  • Pegasus Age at Entry: Min 16, Max 84
  • Self Assurance Age at Entry: Max 69
  • Covered child must be between 30 days to 18 years of age
  • The cover is only for permanent UK residents, including foreign nationals who are residents of the UK. British expatriates that reside overseas are excluded.

Length of coverage

  • Pegasus is a Whole of Life Cover. In some cases, length of cover will depend on basis for premiums.
  • Self-Assurance Plans:
    • Fixed (5 – 40 years)
    • Renewable (5/10 years)
    • Plan should expire at age 85.

Premiums

For Pegasus, premiums are computed based on the following bases of cover.

  • Standard
  • Career Basis
  • Maximum Basis
  • Specified Basis
  • Retirement Basis

Premiums are reviewable for Pegasus. While a person can opt for guaranteed or reviewable premiums for Self Assurance plans.

Benefits automatically included

  • Under Pegasus Ultimate Cover (provided along with Critical Illness Cover)
    • Total Permanent Disability Cover
  • Children’s critical illness protection
  • Ductal carcinoma in situ of the breast

Additional optional cover

  • Under Pegasus Ultimate Cover (provided along with Critical Illness Cover)
    • Waiver of premium
    • Cover Buyback Option
    • Guaranteed insurability options
    • Indexation options
    • Annual installments option
    • Retirement Cover Option
    • Replacement Cover Option

What Is the Critical Illness Cover of Scottish Provident?

Scottish Provident’s Critical Illness Cover is sold under various plans. The two main plans under which critical illness cover is available are Pegasus (Scottish Provident’s Whole of Life plan offering) and Self Assurance (Scottish Provident’s Term plan offering).

Amount of Coverage

There is no minimum benefit amount. The minimum coverage amount can be set based on the minimum premiums required.

  • Pegasus Plan Offering Maximum Amount of Coverage
    • £1,500,000 (Personal Assurance Plan)
    • £2,000,000 (Business Assurance Plan)
  • Self Assurance Plan Offering Maximum Amount of Coverage
    • £2,000,000 (Personal Term or Mortgage Term Plan)
    • £2,000,000 (Business Term Plan)

Child critical illness cover is 50% of the sum insured or £20,000, whichever is lower.

Who Is Covered

The life insured.

Age:

  • Pegasus Plan Offering:
    • Min age at entry: 16
    • Max age at entry: 84
  • Self Assurance Plan Offering Maximum Amount of Coverage
    • Max age at entry: 69
    • Max age at expiry: 85

The life insured’s children:

  • Children, either by birth or legal adoption, as well as step children
  • The children should be between 30 days to 18 years old at the time of diagnosis of the critical illness
  • For the critical illness benefit to be payable, the covered person must survive for at least 14 days from the day of the diagnosis
  • There is no limit to how many children can be covered but only one claim can be made for each child.

What You Will Receive

The critical illness benefit will pay:

  • The benefit amount, if you are diagnosed with a covered critical illness. That is, if the critical illness meets the definitions stated in the policy. The insured person should survive 14 days after the date of the diagnosis.
  • £20,000 or 20% of the sum insured, whichever is lower, if you are diagnosed with carcinoma in situ of the breast.
  • £20,000 or 50% of the sum insured, whichever is lower, if your child is diagnosed with a covered critical illness. The maximum a child can get is £40,000 if both parents have separate cover. That is, £20,000 for each parent, regardless of the number of policies they have with Scottish Provident.

Length of the Cover

Pegasus Plan Offering. Since it is a whole of life plan, cover continues until the person’s death or when the critical illness claim is fully paid up. However, there are instances when the length of cover can be limited, based on the client’s opting for the Retirement Cover option or other options/premium term.

Self Assurance Plan Offering:

  • Fixed: 5 – 40 years
  • Renewable: 5/10 years

Premiums

For Pegasus, Premiums are computed based on the following bases of cover.

  • Standard. The chosen level of cover remains level throughout life and the premiums reflect this.
  • Career Basis. The person insured or policy owner chooses the age by which the selected level of cover is maintained. Once that selected age is reached, the level of cover shifts to the Maximum Basis. Premiums reflect how much is needed for the level to be maintained at the specified age.
  • Maximum Basis. The selected level of cover is maintained for at least 10 years and premiums are reviewed after.
  • Specified Basis. The Person Insured specifies the level of cover and premium. The coverage amount can be any amounts between the Maximum Basis and the Standard Basis.
  • Retirement Basis. The premiums are based on a specified level of cover where the Retirement Cover option is taken up at the first available opportunity. (*Retirement Cover is a variation of the Critical Illness Cover but has fewer critical illnesses covered, as compared to the standard Critical Illness Cover).

Critical Illnesses Covered

The Critical Illness benefit will pay the benefit amount (or a portion) for the following critical illnesses:

Critical Illness Covered Type of Definition Exclusions

Alzheimer’s Disease

ABI+

Aorta Graft Surgery

ABI+

Aplastic Anemia

Scottish Provident

  • Other forms of anaemia

Bacterial meningitis

Scottish Provident

  • Other forms of meningitis that is not caused by bacterial infection

Benign Brain Tumour

ABI+

Blindness

ABI

Cancer

ABI

Cardiomyopathy

Scottish Provident

  • Myocarditis
  • Cardiomyopathy related to alcohol or drug abuse
  • Other forms of heart disease or enlargement

Chronic lung disease

Scottish Provident

Coma

ABI+

Coronary Artery By-pass grafts

ABI+

Creutzfeldt-Jakob Disease

Scottish Provident

  • Other types of dementia (which are covered under dementia)

Deafness

ABI

Dementia

Scottish Provident

Encephalitis

Scottish Provident

  • Chronic fatigue syndrome
  • Myalgic encephalomyelitis

Heart Attack

ABI+

Heart valve replacement

ABI+

HIV Infection

ABI+

Intensive care

Scottish Provident

  • Sickness or injury resulting from drug or alcohol abuse
  • Self-inflicted injury
  • Children 90 days old or younger

Kidney failure

ABI

Liver failure

Scottish Provident

  • Liver failure caused by drug or alcohol abuse

Loss of hands or feet

ABI

Loss of independent existence

Scottish Provident

Loss of speech

ABI

Major Organ Transplant

ABI

Motor Neurone Disease

ABI

Multiple Sclerosis

ABI

Multiple system atrophy

Scottish Provident

Paralysis of limbs

ABI

Parkinson’s Disease

ABI

Pneumonectomy

Scottish Provident

  • Surgical removal of a lobe of the lungs
  • Lung resection or incision

Primary Pulmonary Hypertension

Scottish Provident

  • Pulmonary hypertension where the cause is not primary

Progressive Supranuclear Palsy

Scottish Provident

Pulmonary Artery Graft Surgery

Scottish Provident

Stroke

ABI+

Structural Heart Surgery

Scottish Provident

Systemic Lupus Erythematosus

Scottish Provident

  • Symptoms that are used to show permanent deficit of the neurological system excludes headaches, lethargy, seizures and fatigue.

Terminal Illness

Third Degree Burns

ABI

Traumatic Head Injury

ABI

Additional Benefits (for Critical Illness)

Carcinoma in Situ of the Breast.  This involves total mastectomy surgery where the insured person survives for at least 14 days from the day of the diagnosis. The coverage will pay the lower of £15,000 or 20% of the sum insured, whichever is lower. The cover does not include: Surgery, prophylactic mastectomy or other procedures done without historical evidence or cancer in situ, as well as lumpectomy, partial mastectomy and partial or total subcutaneous mastectomy.

Carcinoma in situ of the breast is an additional coverage on top of the covered critical illnesses in the list. Payment of a claim for mastectomy for carcinoma in situ of the breast will not affect the amount to be received in case of a claim for a critical illness included in the list. However, if a claim for a covered critical illness is paid out, the coverage will stop and succeeding claims for carcinoma in situ will no longer be payable.

Total Permanent Disability. Payment for this will be based on the definition stated on the policy, which can be:

  • Own occupation. Payment will be when the insured person is unable to perform the tasks required for his own occupation.
  • Two out of six Work tasks. Payment will be when the insured person is unable to perform two out of six work tasks.
  • Three out of six Life tasks. Payment will be when the insured person is unable to perform two out of six life tasks.

Other Optional Benefits/Cover That Can Be Added to the Cover

Waiver of Premium benefit. Premiums are waived if the person insured is unable to work for a consecutive period of at least 6 months due to illness or injury. The person insured should be 60 years old when the plan begins.

Cover Buyback Option. After a claim has been made for critical illness, the policy will no longer provide the critical illness cover. However, the Person Insured can opt to get cover buyback option, which enables the person insured to take more over. The “extended” critical benefit will include cancer, stroke, and heart attack. This should be taken before the Insured Person turns 65 years of age.

Guaranteed Insurability Option. The insured person is able to apply for additional cover to be applied for events such as moving to a new home, having a home renovated, marriage or entering a civil partnership, a job promotion or transfer to a new job with a higher salary. The person insured must be over 55 years old and will need to show that he is not undergoing treatment.

Indexation options. This allows the benefit amount to increase annually in line with the inflation rate.

Annual Installment Options. This allows the beneficiaries to receive the proceeds of the cover in equal annual installments rather than a lump sum.

Retirement Cover Option. For the Ultimate Cover plan under Pegasus, this allows the Insured to replace the Ultimate Cover with one where there is a smaller number of critical illnesses covered. The critical illnesses included are Alzheimer’s disease, blindness, deafness, dementia, loss of independent existence and Parkinson’s Disease. This can be taken up when the Insured person reaches 65 or on the first plan review date, whichever is later.

Replacement Cover Option. If a claim for the full benefit amount has already been paid and the plan provides for joint life coverage, the person who did not make a claim can get a replacement policy without needing to show further medical evidence. This is to be taken up before the person applying for the option reaches the age of 55.

What You Are NOT Covered For

The client will not receive any Critical Illness payouts for:

  • Diagnoses that does not match the definitions provided for a specific critical illness
  • Delayed claims such that medical evidence can no longer be obtained to support the claim
  • Self-inflicted injuries
  • Claims where the Insured Person did not survive for at least 14 days after the date of diagnosis
  • For Child Critical Illness Cover:
    • Congenital conditions
    • Conditions where symptoms were evident before the child was covered by the policy or before the policy was reinstated (if it lapsed or was cancelled due to failure to pay premiums)
    • Claims where the child failed to survive for at least 14 days after the date of diagnosis

Making a Claim

To make a claim, the insured person or representative needs to:

  • File a claim form and submit the completed form to the Scottish Provident Claims Department
  • Send Scottish Provident’s letter to the doctor/consultant, who will then send his medical report directly to Scottish Provident’s office.
  • Submit himself to an independent medical assessment from an Scottish Provident-accredited doctor, when required. Scottish Provident will shoulder all related expenses.

Submitting a claim should be done as soon as possible – after the diagnosis of a critical illness.

This article is for informational pruposes only and should not be considered a financial advice. Contact Scottish Provident directly for information about their products.

Last updated on: 25.07.2012

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