Policy Provisions. Level Term Assurance LTA-S (2006)

Transcription

1 life insurance By law we are required to give you a copy of the current policy provisions (terms and conditions) for this product before a policy is set up for you. When the policy is set up, you'll receive another copy along with your policy schedule. Please note these are our standard terms and certain provisions may not apply. In certain cases special terms may be included on your policy. If they are, you'll be told about them if your application is accepted.

2 Policy Provisions Level Term Assurance LTA-S (2006)

3 Introduction This booklet provides details for a Level Term Assurance policy. Each schedule issued by Scottish Widows plc ( Scottish Widows ) and referring to this booklet, the provisions contained in this booklet, and any valid endorsements to these issued by Scottish Widows, make up the policy documents for a contract between Scottish Widows and the policyholder(s) named in the schedule, and are in their entirety conclusive as to its terms. NOTES TO HELP YOU UNDERSTAND YOUR POLICY. Because this is a complicated legal document, we have provided explanations in the right-hand margin (just like the information you are reading now). However, please note that these explanations do not form part of the contract between us. They are included only to help you understand the policy. This contract and all other communications will be written in English. Please keep this document in a safe place. Also please remember to inform us if you change your name, address or bank account. Please contact us in plenty of time if you are going to claim benefits, to make sure you don t lose out - see provisions 3.3, 4.5 and 5.4 about this. If yours is a policy with more than one life assured and without death benefit, it is important to inform us within 2 months if a life assured dies to ensure you can continue the critical illness cover with another policy on the remaining life assured, as this policy will have automatically expired, even if premium collection has continued. You can reach us at our main administrative office: 15 Dalkeith Road, Edinburgh, EH16 5BU or telephone number We may record and monitor calls to help us to improve our service. It will help if you can quote your policy number when you contact us. 2

4 Contents 1 Preliminary 4 2 Premiums 5 3 Death and Terminal Illness Benefit 8 4 Critical Illness Benefit 11 5 Children s Benefit 22 6 Waiver of Premium Benefit 25 7 Options to Increase the Death Benefit 30 8 General 34 3

5 1. Preliminary 1.1 Meanings of terms We or us means Scottish Widows. You means the policyholder(s) or their legal successor(s) except where a different meaning is given in a provision. Actuary is any person who holds an appointment to Scottish Widows in accordance with SUP 4.3.1R of the Financial Services Authority Handbook (as may be amended from time to time). If there is more than one such person then we will choose one of them as our Actuary. Other terms are used throughout the provisions and their meanings or descriptions are established in the schedule or in particular provisions. Provision 1 deals with some formalities. The policyholder(s) is named in the schedule. Legal successor means someone to whom the whole legal entitlement under the policy has been transferred, for example a trustee or a full assignee. This does not include assignees in security (usually a mortgage lender), because although they have important rights they do not have all of them. In these provisions, the masculine includes the feminine and the singular includes the plural and vice versa, unless the context requires otherwise. Headings to the provisions (except for those headings which are the names of illnesses or options) are included for reference only and do not form part of the provisions or affect their interpretation. 1.2 Survivorship If there is more than one of you, on the death of any of you, the whole of your entitlement under the policy will pass to the survivor(s). 4

6 2. Premiums 2.1 When and how Premiums will be payable on the dates and at the intervals shown in the schedule. However, no premiums will be payable after the date on which any cash sum becomes payable under provision 3 or 4 or after cancellation of the policy under provision 4.2. Premiums will be payable on or before the due date and must be paid by a method acceptable to us. Provision 3 deals with cover for death and terminal illness. Provision 4 deals with critical illness cover. The schedule will say which cover applies. 2.2 Amount Subject to the following paragraph and to provision 2.3, the amount of each premium will be as shown in the schedule. However, if waiver of premium benefit applies to the policy, we will reduce any premium payable in respect of the last six months prior to the expiry date. The amount of the reduction will be as we determine. 2.3 Premium reviews This provision applies only if the schedule states that critical illness benefit applies to the policy. The expiry date is shown in the schedule. The amount of the reduction will be similar to the amount included in premiums to pay for the cost of waiver of premium benefit. The premiums for a policy where critical illness benefit applies are reviewable as explained below. The fifth anniversary of the commencement date and every fifth anniversary after that are review dates. The first review date, or review date if your policy term is under 10 years, is shown in the schedule. 5

7 The premium for your policy is shown in the schedule. Every five years, before each review date, we will review the premiums for the policy. As a result of a review, the premiums that are payable on or after that review date may increase, stay the same or decrease. We will never alter premiums just because you are older at a review date, because your health or lifestyle has changed since the commencement date of the policy, or because of any waiver of premium claims or children s benefit claims that might have been made. Waiver of premium benefit is covered in provision 6. Children s benefit is covered in provision 5. At the commencement date of the policy our actuary and our reinsurers made assumptions that were intended to last for the whole term of the policy. At each review date, our actuary and our reinsurers will decide whether the assumptions which each last used are still appropriate for the remaining term of the policy. The meaning of Actuary is given in provision 1.1. The commencement date of the policy is shown in the schedule. Our actuary will only look at the assumptions relating to our expectation of the future number, type and timing of critical illness, terminal illness and death claims for the following valid reasons: new information arising from the analysis of our own past claims experience for similar types of policies, new information arising from our reinsurer s and other insurance companies past claims experience for similar types of policies, new information arising from UK population statistics for mortality and morbidity, the impact of medical advances and medical practices on future claims including genetic profiling, screening, detection, diagnostic techniques and treatment methods for any of the claim events covered under the policy, and Morbidity is the prevalence of critical illness. any event outside our control which was unforeseen at the commencement date of the policy or since the last review date if sooner. 6

8 If either the assumptions that our actuary now believes are appropriate or the future cost of reinsurance are different from before, our actuary will use a fair and reasonable method of calculating the revised premium. In calculating that revised premium, our actuary will only allow for any change in the future cost of reinsurance to the extent that the change arises for the same valid reasons described above. The revised premium will not allow for the previous assumptions having been inappropriate at any time before the review date. There is no minimum or maximum amount by which the premium may increase or reduce. We ll not change your premium to take account of any losses or any gains made as a result of previous assumptions having been wrong. We will write to you at least six weeks before each review date to let you know the result of the review. If the premiums are due to increase you may write to us at least two weeks before the review date asking us to keep them the same but instead to reduce the sum assured provided by us from the review date. Alternatively, you can choose to stop paying premiums altogether in which case the policy will end with no cash value. 2.4 Non-payment If any premium is not paid on or before its due date, we may cancel the policy without value. You must pay your premiums on time to ensure your cover continues. This policy does not have a surrender value. We must inform anyone to whom the policy is assigned in security if premiums are not paid. 7

9 3. Death and Terminal Illness Benefit This provision applies only if the schedule states that death and terminal illness benefit applies to the policy. References in this provision to you are (a) if there is only one life assured: to the life assured; (b) if there is more than one life assured and the schedule states that death and terminal illness benefit is payable in respect of the first life assured to meet our conditions for payment of this benefit: to any of the lives assured; (c) if there is more than one life assured and the schedule states that death and terminal illness benefit is payable in respect of the last life assured to meet our conditions for payment of this benefit: to the last life assured to die or to contract a terminal illness as defined in provision Payment of sum assured Subject to any further provisions referred to in the schedule, if before the expiry date (a) (b) you die, or you contract a terminal illness as defined in provision 3.2 and limited by provision 3.4, and the requirements of provision 3.3 are met then on the day of receipt by us at our main administrative office of written notice of the death or of such proof as we may reasonably require of the terminal illness, whichever is appropriate, a cash sum equal to the sum assured will become payable. The expiry date is shown in the schedule. Provision 3.3 is about our claim requirements. Provision 3.4 states circumstances when terminal illness is not covered. The address of our main administrative office is shown at the start of this booklet. 8

10 No more than one cash sum will be payable under this provision. If a cash sum becomes payable under this provision, no cash sum will be payable under any other provision (other than any children s benefit that has already become payable) and the policy will be cancelled. 3.2 Terminal illness Terminal illness means an advanced or rapidly progressing incurable illness where, in the opinion of an attending consultant and our Principal Medical Officer, the life expectancy is no greater than twelve months. 3.3 Terminal illness claim requirements Unless we decide otherwise, no cash sum will be payable under provision 3.1 in respect of terminal illness unless (a) (b) (c) (d) (e) we receive notice of the illness at our main administrative office at least 18 months before the expiry date, the claim form that we will issue on receipt of such notice is completed and received back by us at our main administrative office within 28 days of issue, we receive (at the expense of the claimant, whose reasonably-incurred expenses we will reimburse if we accept the claim) such certificates and information about, and such evidence of, the illness and the medical history of the relevant life assured as we may reasonably require, the relevant life assured attends (at our reasonable expense) such examinations by a medical examiner appointed by us as we may reasonably require, and the certificates, information and evidence in (c) above and any examinations in (d) above all indicate to us (acting reasonably) that the claim is valid in accordance with these policy provisions. The address of our main administrative office is shown at the start of this booklet. The expiry date is shown in the schedule. In practice, the claimant will be whoever is for the time being legally entitled to deal with the policy, except that if the policy is assigned in security it will be the assignor for this purpose of providing evidence. 9

11 3.4 Terminal illness exclusions No cash sum will be payable under provision 3.1 in respect of terminal illness if (a) the life expectancy at the time of the diagnosis of the illness is greater than the time to run to the expiry date, or The expiry date is shown in the schedule. (b) the relevant life assured is not resident in one of the following territories: the countries of the European Community, the Channel Islands, the Isle of Man, Norway, Switzerland, Canada, the United States of America, Australia, New Zealand, and such other territories as we may decide. 10

12 4. Critical Illness Benefit References in this provision to you are to the life assured or, if there is more than one life assured, to any of the lives assured. 4.1 Payment of sum assured if provision 3 also applies This provision applies only if the schedule states that both critical illness benefit and death and terminal illness benefit apply to the policy. Subject to provision 4.5 and to any specific exclusions referred to in the schedule, if, before the expiry date (a) you contract a critical illness as defined in provision 4.4, and The expiry date is shown in the schedule. (b) we receive notice of this in accordance with provision 4.5, then on the day of receipt by us at our main administrative office of such proof as we may reasonably require of the critical illness, a cash sum equal to the sum assured will become payable. The address of our main administrative office is shown at the start of this booklet. No more than one cash sum will be payable under this provision. If a cash sum becomes payable under this provision, no cash sum will be payable under any other provision (other than any children s benefit that has already become payable) and the policy will be cancelled. 11

13 4.2 Payment of sum assured if provision 3 does not apply This provision applies only if the schedule states that (a) (b) critical illness benefit applies to the policy, and death and terminal illness benefit does not apply to the policy. Subject to provision 4.5 and to any specific exclusions referred to in the schedule, if, before the expiry date (a) you contract a critical illness as defined in provision 4.4, For joint life policies, this cover expires on the death of the first life assured to die. However, if provision 3 does not apply to this policy, you can continue the cover with a new policy - see provision 4.3. The expiry date is shown in the schedule. (b) (c) (d) we receive notice of this in accordance with provision 4.5, you survive for at least 21 days after the diagnosis of the critical illness by a consultant specialising in the appropriate area of medicine, and none of the lives assured (if there is more than one) have died, then on the day of receipt by us at our main administrative office of such proof as we may reasonably require of the critical illness and of the above requirements, a cash sum equal to the sum assured will become payable. The address of our main administrative office is shown at the start of this booklet. No more than one cash sum will be payable under this provision. If a cash sum becomes payable under this provision, no cash sum will be payable under any other provision (other than any children s benefit that has already become payable) and the policy will be cancelled. If there is more than one life assured and one of them dies, the policy will be cancelled and no benefits (other than any children s benefit that has already become payable) will be payable. Any premiums due and paid since the death will be refunded. The option under provision 4.3 will apply. 12

14 4.3 Option after death of a life assured If the policy is cancelled under provision 4.2 on the death of a life assured, then subject to the following paragraphs the person who for the time being is, or but for any assignment in security would be, legally entitled to deal with the policy may replace it with a new policy. The request for a replacement policy must be received by us at our main administrative office within two months of the death of the deceased life assured. The replacement policy will be a policy from our normal range at the time of the replacement. The expiry date of the replacement policy will be not later than the expiry date of this policy, unless that date would be less than five years after the commencement date of the replacement policy, in which case the expiry date of the replacement policy will be the fifth anniversary of that policy s commencement date. A policy is assigned in security if it has been transferred to a person or company as security for a loan. This option can be exercised even if the life assured has already been diagnosed as having a critical illness or a disability which could lead to the payment of critical illness benefit or waiver of premium benefit. The address of our main administrative office is shown at the start of this booklet. The sum assured under the replacement policy will be not more than the sum assured at that time under this policy and, if less, will be no less than our then current minimum for such replacement policies. The life or lives assured under the replacement policy will be the surviving life or lives assured under this policy. The premiums under the replacement policy will be in accordance with our then current practice and rates and with the then age and smoker status of the life or lives assured, and will have regard to any additional premium, or any addition-to-age or exclusion-of-risk clause, in this policy which is relevant to the life assured or lives assured under the replacement policy. 13

15 Subject to the above paragraphs, the other terms of the replacement policy will as far as possible (as we shall reasonably decide) be equivalent to those under this policy. 4.4 Critical illness For the purposes of provisions 4.1 and 4.2, a critical illness is one of the following, provided that it does not result directly or indirectly from any of the causes listed in provision 4.6: (a) Alzheimer s Disease A global impairment of brain function such that permanent supervision and assistance by a third party is required. The diagnosis must be made by an appropriate consultant who should be satisfied that there is no other discernible cause. (b) Aorta Graft Surgery Undergoing surgery for disease of the aorta needing excision and surgical replacement of a portion of the diseased aorta with a graft. For this definition, aorta means the thoracic and abdominal aorta but not its branches. (c) Benign Brain Tumour A non-malignant tumour in the brain resulting in permanent deficit to the neurological system. Tumours or lesions in the pituitary gland are not covered. (d) Blindness Total permanent and irreversible loss of all sight in both eyes. 14

16 (e) Cancer Any malignant tumour characterised by the uncontrolled growth and spread of malignant cells and invasion of tissue. The term cancer includes leukaemia and Hodgkin s disease but the following are excluded: (i) (ii) All tumours which are histologically described as pre-malignant, as non-invasive or as cancer in situ. All tumours of the prostate unless histologically classified as having a Gleason score greater than 6 or having progressed to at least TNM classification T2N0M0. (iii) All forms of lymphoma in the presence of any Human Immunodeficiency Virus. (iv) Kaposi s sarcoma in the presence of any Human Immunodeficiency Virus. (v) Any skin cancer other than invasive malignant melanoma. (f) Coma A state of unconsciousness with no reaction to external stimuli or internal needs, persisting continuously with the use of life support systems for a period of at least 96 hours and resulting in permanent neurological deficit. Coma secondary to alcohol or drug misuse is not covered. (g) Coronary Artery Surgery The undergoing of: (i) open heart surgery on the advice of a Consultant Cardiologist to correct narrowing or blockage of one or more coronary arteries with by-pass grafts but excluding balloon angioplasty, laser relief or any other procedures, or 15

17 (ii) heart surgery by the undergoing, on the advice of a Consultant Cardiologist, of any interventional technique (e.g. balloon angioplasty) involving the use of transluminal coronary catheters to correct significant stenosis of at least 50% diameter narrowing of two or more coronary arteries. Angiographic evidence to support the necessity for that intervention will be required. (h) Deafness Total permanent and irreversible loss of all hearing in both ears. (i) Heart Attack The death of a portion of heart muscle, due to inadequate blood supply, that has resulted in all of the following evidence of acute myocardial infarction: (i) (ii) typical chest pain; new characteristic electrocardiographic changes; (iii) the characteristic rise of cardiac enzymes, troponins or other biochemical markers; where all of the above shows a definite acute myocardial infarction. Other acute coronary syndromes, including but not limited to angina, are not covered under this definition. (j) Heart Valve Replacement or Repair Undergoing open heart surgery from medical necessity to replace or repair one or more heart valves. (k) HIV/AIDS Contracted in Certain Circumstances Infection by any Human Immunodeficiency Virus (HIV) acquired by any person employed in a medical facility, in the police force or in one of the fire services in the course of carrying out normal duties. 16

18 The infection must have been acquired during the 12 months prior to diagnosis and be as a result of contact with a HIV infected person or with a HIV infected medical instrument. The incident involving such contact must have occurred after the commencement date, and must have been reported, investigated and documented in accordance with established occupational procedures for such accidents. (l) HIV/AIDS as a Result of Blood Transfusion Infection by any Human Immunodeficiency Virus (HIV) provided that we, on the advice of our Principal Medical Officer, are satisfied that the infection was due to a blood transfusion given as part of medical treatment after the commencement of the policy. (m) Inability to Perform Duties of Occupation Before age 60 becoming, in our opinion, totally and permanently unable due to illness or injury to perform the duties of your occupation as stated on the application and accepted by us. You must have been in gainful employment immediately before the illness or injury. (n) Kidney Failure End stage renal failure presenting as chronic irreversible failure of both kidneys to function, as a result of which either regular renal dialysis or renal transplant is initiated. (o) Loss of Limbs The permanent physical severance of two or more limbs from above the wrist or ankle joint. (p) Loss of Speech Total permanent and irreversible loss of the ability to speak as a result of physical injury or disease. 17

19 (q) Major Organ Transplant The actual undergoing as a recipient of, or inclusion on an official UK waiting list for, a transplant of a heart, liver, lung, pancreas or bone marrow. (r) Motor Neurone Disease Confirmation by a Consultant Neurologist of a definite diagnosis of Motor Neurone Disease. (s) Multiple Sclerosis A definite diagnosis by a Consultant Neurologist of Multiple Sclerosis which satisfies all of the following criteria: (i) (ii) There must be current impairment of motor or sensory function, which must have persisted for a continuous period of at least six months. The diagnosis must be confirmed by diagnostic techniques current at the time of the claim. (t) Paralysis/Paraplegia Total irreversible loss of muscle function or sensation to the whole of any two limbs as a result of injury or disease. The disability must be permanent and supported by appropriate neurological evidence. (u) Parkinson s Disease Confirmation by a Consultant Neurologist of a definite diagnosis of Parkinson s Disease. Parkinson s Disease secondary to alcohol or drug misuse is not covered. (v) Stroke A cerebrovascular incident resulting in permanent neurological damage. Transient Ischaemic Attacks are specifically excluded. 18

20 (w) Third Degree Burns Third degree burns covering at least 20% of the body surface area. (x) Total Permanent Disability A disability as a result of illness, accident or injury: (a) which means that for more than six months you have been unable to perform even with the use of special equipment three or more of the following activities, so that you always require the physical assistance of another person: (i) Washing and Bathing The ability to wash in the bath or shower (including getting into and out of the bath or shower) or wash satisfactorily by other means. (ii) Dressing and Undressing The ability to put on, take off, secure and unfasten all necessary garments and, as appropriate, any braces, artificial limbs or other surgical appliances. (iii) Eating You can wash even if all elements except one can t be done - for example, if you can t wash in the bath or shower but are able to wash satisfactorily by other means. Unlike washing, you can dress only if you can do all the elements involved in putting on all the garments that are relevant and necessary. The ability to feed yourself once food has been prepared and made available. (iv) Toileting The ability to use the lavatory or commode or otherwise manage bowel and bladder function so as to maintain a satisfactory level of personal hygiene. (v) Transferring The ability to move from a bed to an upright chair or wheelchair and vice versa. 19

21 and (b) which, in the reasonable opinion of our Principal Medical Officer, is permanent, meaning that, even with appropriate medical intervention and rehabilitation, there is no reasonable prospect of you ever being able to perform three or more of the activities as in part (a). 4.5 Critical illness claim requirements Unless we decide otherwise, no cash sum will be payable under provision 4.1 or 4.2 in respect of critical illness unless (a) we receive at our main administrative office notice of the illness within six months of its initial diagnosis, (b) the claim form that we will issue on receipt of such notice is completed and received back by us at our main administrative office within 28 days of issue, (c) we receive (at the expense of the claimant, whose reasonably-incurred expenses we will reimburse if we accept the claim) such certificates and information about, and such evidence of, the illness and the medical history of the relevant life assured as we may reasonably require, (d) the relevant life assured attends (at our reasonable expense) such examinations by a medical examiner appointed by us as we may reasonably require, and The address of our main administrative office is shown at the start of this booklet. In practice, the claimant will be whoever is for the time being legally entitled to deal with the policy, except that if the policy is assigned in security it will be the assignor for this purpose of providing evidence. (e) the certificates, information and evidence in (c) above and any examinations in (d) above all indicate to us (acting reasonably) that the claim is valid in accordance with these policy provisions. 20

22 4.6 Exclusions The causes referred to in provision 4.4 are: (a) Criminal acts Taking part in a criminal act. (b) Drug abuse Alcohol or solvent abuse, or the taking of drugs except under the direction of a registered medical practitioner. (c) Failure to follow medical advice Unreasonable failure to seek or follow medical advice. (d) Self-inflicted injury Intentional self-inflicted injury. (e) War and civil commotion War, invasion, hostilities (whether war is declared or not), civil war, rebellion, revolution or taking part in a riot or civil commotion. 21

23 5. Children s Benefit This provision applies only if the schedule states that critical illness benefit applies to the policy. References in this provision to child are to any natural or legally adopted child of the life assured (or, if there is more than one life assured, of any of the lives assured) who is financially dependent on the life assured (or on any of the lives assured). 5.1 Payment event Subject to provision 5.4, if, before the expiry date (a) a child contracts a critical illness as defined in provision 5.3 after age six months and before age eighteen years, The expiry date is shown in the schedule. (b) the relevant child survives for at least 21 days after diagnosis of the critical illness by a consultant specialising in the appropriate area of medicine, and (c) we receive notice of this in accordance with provision 5.4, then on the day of receipt by us at our main administrative office of such proof as we may reasonably require of the critical illness, a cash sum of the amount specified in provision 5.2 will become payable. No more than one cash sum will be payable under this policy in respect of the same child. The address of our main administrative office is shown at the start of this booklet. When a cash sum becomes payable because of a child s critical illness, that child is no longer covered, but otherwise the policy continues as before. 5.2 Amount The cash sum payable under provision 5.1 will be the lesser of: (a) 50% of the sum assured, and 22

24 (b) 20,000, less the total value of any benefits payable in respect of a critical illness or other illness of the child under any other policies issued by us. 5.3 Critical illness For the purposes of provision 5.1, a critical illness is one of the critical illnesses defined in provision 4.4, other than (a) Inability to Perform Duties of Occupation, and (b) Total Permanent Disability, provided that it does not result directly or indirectly from any of the causes stated in provision Children s benefit claim requirements Unless we decide otherwise, no cash sum will be payable under provision 5.1 in respect of critical illness unless: (a) we receive at our main administrative office notice of the illness within six months of its initial diagnosis, (b) the claim form that we will issue on receipt of such notice is completed and received back by us at our main administrative office within 28 days of issue, (c) we receive (at the expense of the claimant, whose reasonably-incurred expenses we will reimburse if we accept the claim) such certificates and information about, and such evidence of, the illness and the child s medical history as we may reasonably require, (d) the relevant child attends (at our reasonable expense) such examinations by a medical examiner appointed by us as we may reasonably require, and The address of our main administrative office is shown at the start of this booklet. In practice, the claimant will be whoever is for the time being legally entitled to deal with the policy, except that if the policy is assigned in security it will be the assignor for this purpose of providing evidence. (e) the certificates, information and evidence in (c) above and any examinations in (d) above all indicate to us (acting reasonably) that the claim is valid in accordance with these policy provisions. 23

25 5.5 Exclusions The causes referred to in provision 5.3 are: (a) the causes listed in provision 4.6, (b) any critical illness, congenital defect, disability, or related condition which was suffered by the child or which was present (as the case may be): (i) before the child reached the age of six months, or Critical illnesses caused before the child becomes covered by the policy are not included. (ii) before the date of legal adoption of the child by a life assured, or (iii) before the commencement date of the policy. 24

26 6. Waiver of Premium Benefit This provision applies only if the schedule states that waiver of premium benefit applies to the policy. 6.1 Special terms The following terms are used in provision 6. Covered life means the life assured if there is only one life assured or, if there is more than one life assured, any life assured in respect of whom waiver of premium benefit is stated in the schedule to apply. Remember it is important to keep paying your premiums on time for the first six months of disability to ensure the cover still applies. It may help prove your case if you tell us about the disability after (say) three months. Relevant life means a covered life suffering disability. Normal gainful occupation means the occupation from which the relevant life last derived any earnings before the start of disability. If there was more than one such occupation, it will mean the one from which the largest part of those earnings was derived. Disability means, subject to provision 6.6, either (a) if the covered life was in gainful employment immediately before the period of disability, he is totally unable due to illness or injury to follow his normal gainful occupation and is not engaging in any other occupation, or Provision 6.6 states circumstances in which disability is not covered. (b) if the covered life was not in gainful employment immediately before the period of disability, he is of necessity confined to his home or to a recognised medical institution and is unable to live without the assistance of a carer on a daily basis. Period of disability means any period throughout which a covered life suffers disability arising after the commencement date. However, 25

27 (a) where the disability results directly or indirectly from or is aggravated by pregnancy or childbirth, we will not consider the period of disability to have started until thirteen weeks after the end of pregnancy, and (b) if this policy was issued under the terms of an option equivalent to that in provision 4.3, in determining the period of disability we will take the commencement date to be that of the policy containing the option, provided that we would have treated the disability as such under that policy. Provision 4.3 allows for the replacement of a joint life policy having no death benefit, if it expires due to the death of a life assured. Deferred period means the first 26 weeks of a period of disability. Claim period means that part of a period of disability commencing immediately after the later of: (a) the day on which we receive at our main administrative office notice of the disability, and Note that a claim period may end before the end of a period of disability. (b) the end of the deferred period and ending immediately before the earliest of (i) the relevant life s 65th birthday, (ii) the expiry date, and (iii) the day any amount becomes payable under provision 3 or Waiver of monthly premiums If premiums are payable monthly then, subject to provision 6.5 and to any further provisions referred to in the schedule, we will waive any premium due during a claim period and will treat it as having been paid. The expiry date is shown in the schedule. Provisions 3 and 4 are those for death and terminal illness benefit and for critical illness benefit. Provision 6.5 covers evidence that we will need. 26

28 6.3 Waiver of other premiums In this provision, (a) credited waiver benefit means, in relation to a claim period, the total of all premiums waived in accordance with this provision during that claim period, and Provision 6.3 states how waiver of premium benefit works if premiums are payable other than monthly. (b) waiver benefit due means, in relation to a claim period just ended, the amount calculated by (i) taking each twelve month period which begins on the commencement date or an anniversary of the commencement date and which contains the whole or part of the claim period and, for each of those periods, (ii) multiplying the amount of the premiums due or waived during each twelve month period by the number of months (taken to the higher whole month) by which the twelve month period overlaps the claim period and then dividing by twelve, and (iii) totalling the results of (ii) for all the twelve month periods relevant to the claim period. If premiums are payable other than monthly then, subject to provision 6.5 and to any further provisions stated in the schedule, any premium due during a claim period will be waived and will be treated as having been paid. However, if for the claim period the credited waiver benefit is less than the waiver benefit due, an amount equal to the difference will be payable by us at the end of the claim period. If for the claim period the credited waiver benefit is greater than the waiver benefit due, a special premium will become payable on the day immediately following the claim period. This premium will be equal in amount to the excess of the credited waiver benefit over the waiver benefit due. Provision 2.4 will apply in respect of it. Provision 2.4 deals with what happens when the premiums due are not paid. 27

29 If the special premium has not been paid by the end of twenty eight days (or such longer period not exceeding thirteen months from the end of the claim period, as we may decide) after the date of our letter notifying you of the amount of the special premium, we may cancel the policy without value. If a benefit becomes payable under provision 3, 4 or 5 and the special premium has not been paid, we will deduct from the benefit payable the amount of the special premium plus interest from the day immediately following the claim period to the day the benefit is paid. The rate of interest will be reasonably decided by us. Provisions 3, 4 and 5 are those for death and terminal illness benefit, critical illness benefit and children s benefit. 6.4 Linked claims We will treat successive periods of disability as a single period of disability if the successive periods (a) arise from the same cause, and are separated only by less than six months of active full-time work, or (b) arise from different causes and are separated only by less than one month of active full-time work except that we will not treat such intervening periods of active full-time work as part of the period of disability. The deferred period (wait of 26 weeks before premiums are waived) would not apply more than once to successive periods of disability linked by provision 6.4, but in the intervening periods premiums are payable. 6.5 Evidence of disability We will not waive any premium unless (a) such certificates, information and evidence as we reasonably require as proof of the start and continuation of the period of disability are provided to us at your expense, and (b) the relevant life is examined at our expense by an examiner appointed by us as often as we reasonably require. 28

30 6.6 Exclusions The disability must not result directly or indirectly from: (a) Criminal acts Taking part in a criminal act. (b) Drug abuse Alcohol or solvent abuse, or the taking of drugs except under the direction of a registered medical practitioner. (c) Failure to follow medical advice Unreasonable failure to seek or follow medical advice. (d) Self-inflicted injury Intentional self-inflicted injury. (e) War and civil commotion War, invasion, hostilities (whether war is declared or not), civil war, rebellion, revolution or taking part in a riot or civil commotion. 29

31 7. Options to Increase the Death Benefit This provision applies (a) only if the schedule states that death and terminal illness benefit applies to the policy, and (b) subject to any further provision referred to in the schedule. The options under provisions 7.1 and 7.2 will not be available if a life assured has been diagnosed as suffering a terminal illness (as defined in provision 3.2) or if premiums are being waived under this policy. 7.1 Option on marriage or civil partnership, childbirth or legal adoption Subject to the following paragraphs and to provision 7.3, you may supplement this policy by a new term assurance policy within three months of the following events occurring after the commencement date: (a) your marriage or registering as a civil partner, or (b) the birth of a child of yours, or (c) the legal adoption of a child by you. Provision 7 gives options to increase your cover in some circumstances, if the option applies to your policy. If you want to exercise one of these options, please phone us, and we will explain what you need to do. The number is shown at the start of this booklet. As long as a life assured has not been diagnosed with a terminal illness or waiver of premium benefit is not being claimed for under the policy, your rights under any of the options in provision 7 do not depend on the state of health of the life or lives assured at the time. In fact, we will not even ask about their state of health if you wish to take up one of the options. The meaning of civil partner, registered civil partner and civil partnership are as in the Civil Partnership Act The term of the new policy must be a whole number of years and its expiry date must fall not later than nine months after the expiry date of this policy. However, if the term of the new policy would then be less than our then current minimum for the class of the new policy, the expiry date of the new policy will instead be the earliest anniversary of the commencement date of that policy which gives the minimum term for the new policy. 30

32 7.2 Option on mortgage increase Your new mortgage means your existing house mortgage after you have increased it or your new or additional house mortgage, as appropriate. Subject to the following paragraphs and to provision 7.3, you may supplement this policy by a new term assurance policy within three months of increasing a previous house mortgage of yours or taking out a new or additional house mortgage, provided that this policy formed part of the security for your previous house mortgage within the three months prior to the start of your new mortgage or of its increase. The term of the new policy must be a whole number of years, the expiry date falling not later than the earlier of (i) (ii) nine months after the expiry date of this policy, nine months after the date on which the new mortgage is due to be redeemed, The expiry date is shown in the schedule. unless the term of the new policy would then be less than our then current minimum for the new policy type, in which case the expiry date of the new policy will instead be the earliest anniversary of the commencement date of the new policy which gives the minimum term for the class of the new policy. The total of the sum assured under the new policy and the sum assured under this policy must not exceed your total house mortgage liability at the start of your new mortgage or of its increase. The sum assured under the new policy must not exceed the excess of your total house mortgage liability at the start of your new mortgage over your highest total house mortgage liability within the previous three months. This last paragraph links the maximum increase in cover to the increase in your mortgage liability in a way which ignores a short gap between mortgages. 31

33 7.3 Other conditions The exercise of an option under provision 7.1 or 7.2 is subject to the following conditions: (a) We must receive your request to exercise the option, in a form acceptable to us at our main administrative office, before the expiry date and before the 50th birthday of the life assured if there is only one life assured or the 46th birthday of the oldest life assured if there is more than one life assured. The address of our main administrative office is shown at the start of this booklet. The expiry date is shown in the schedule. (b) All premiums due before the exercise of the option must have been paid. (c) You must be, at the commencement date and when the exercise of the option is to take effect, a life assured under the policy if there is only one life assured, or, if there is more than one of you, at least one of you must be at both those dates a life assured under the policy. (d) You must be habitually resident in the United Kingdom when the exercise of an option is to take effect. (e) We must receive such evidence of the event giving rise to the option as we reasonably require. (f) The new policy will be from the normal range of policies which we offer at the time. (g) The new policy will have the same life assured (lives assured if there is more than one surviving life assured) as this policy. 32

34 (h) Death benefit and, subject to (f) above, terminal illness benefit and, if it applies to this policy, waiver of premium benefit will apply to the new policy. However, critical illness benefit will not apply to the new policy. (i) (j) The total of the sum assured under the new policy, the sum assured under any policies which are the result of earlier exercise of options under provision 7.1 or 7.2 and the sum assured under this policy at its commencement date, must not exceed twice the amount of the sum assured shown in the schedule at the commencement date of this policy or in the relevant schedule at the commencement date of any previous policy for which this policy is directly or indirectly a replacement. The overall total of the amount of the sum assured under the new policy and the sums assured under this and all other policies issued by us on the life of the life assured or any of the lives of the lives assured must not exceed 100,000 or such greater amount as we may from time to time allow. (k) The premiums and the other terms for the new policy will be in accordance with our then current practice and rates, and with the age and smoker status of the life or lives assured, and will have regard to any additional premium, or any addition-to-age or exclusion-of-risk clause, in this policy. (l) We reserve the right to effect the increase in benefit as nearly as reasonably possible either by the replacement of this policy with a new policy or by increasing the benefits under this policy. 33

35 8. General 8.1 Nil surrender value This policy will not have a surrender value. 8.2 Changes to policy terms If while the policy is in force This important provision sets out powers that we have to alter the terms of your policy. (a) there is any change in law or taxation affecting us or the policy, (b) there is any change in circumstances which in our opinion makes it impossible or impracticable to carry out any one or more of these provisions, or (c) we become aware of any error or omission in the policy documents, then we may with immediate effect make such reasonable alterations to the policy documents as we may in good faith consider appropriate in the circumstances. We will inform you in writing of any such alterations. 8.3 Payment of benefits Material facts are those things that affect our decision to accept the application (and any amendment to it) and/or the premiums payable. We reserve the right to not pay benefits or to pay only some of the benefits if, at any time, any of: you, the person making the claim, or anyone else connected with the policy or claim, have given us incorrect information, or you didn t give us all material facts before the commencement date of the policy. 34

36 We will pay benefits only if we receive such proof as we may reasonably require of the happening of the event on which, or the continuation of the circumstances under which, the benefits are payable, the legal entitlement of the claimant, and the date of birth of any person on whose life the benefits depend. We reserve the right to not pay benefits if we have not received such authorisation as we may require to obtain medical information about any person on whose life the benefits depend. Payment of any money by us in accordance with the policy will be a full and sufficient discharge to us in respect of that money, and we will not in any way be responsible to enquire into or see to the application of any such money. 8.4 Production of policy We reserve the right to require the policy for cancellation or endorsement when any benefit is payable or any option is exercised or any alteration is made. We will need to write to your doctor to assess any claim and we will need authorisation to obtain medical information about you. We may require you or a personal representative to provide this authorisation when making a claim. If you or the personal representative do not provide the authorisation and we can t obtain the information we need, we might not pay the claim, and the policy could be made void with no payments to us being refunded. By policy we mean here the schedule and any related endorsements. We may ask you to send these to us. 8.5 Residence Subject to the restrictions in provisions 3.4(b) and 7.3(d) and unless otherwise stated in the schedule, the life or lives assured may, without restriction or payment of additional premium, reside or travel in any part of the world or engage in any occupation. 8.6 References to Acts of Parliament Provision 3.4(b) is a residence requirement to be met before any benefit is payable on terminal illness. Provision 7.3(d) limits residence to the UK for effecting the options to increase the sum assured. Reference in this policy to any Act of Parliament or any part or section of an Act includes any statutory modification or re-enactment of it and any regulations made thereunder for the time being in force. 35

37 8.7 Notice of assignment Notice of assignment must be given to us in writing at our main administrative office as soon as practicable after the assignment takes place. This is important to protect the legal rights of any person to whom the policy is assigned. The address of our main administrative office is shown at the start of this booklet. 8.8 Third Party The terms of the Contracts (Rights of Third Parties) Act 1999 and any other legal third party rights are specifically excluded. This means that only you (or your legal successor(s)) can enforce the contract against us. 36