Ageas Protect’s new individual policy provides relevant life insurance for employees outside a group scheme, allowing both employer and employee to benefit from the tax reliefs larger schemes enjoy. Both the employer and the employee must be resident in the UK.
The policy pays out a lump sum on death or terminal illness (where life expectancy is less than 12 months, with no final policy year exclusion) up to age 75. It is available for employees aged 17-74, with a maximum age at entry of 71. Both level and increasing (indexation, with benefits rising in line with the Retail Prices Index up to a maximum of 10% a year) options are available. In addition, cover can be increased up to 50% in total (up to £75,000) on getting a pay rise (minimum 10%) or promotion, marriage/civil partnership, having or adopting a child and increasing a mortgage. The term of the cover may be increased too (up to age 75) and the maximum term is 50 years and the minimum is three years.
Policies are written in a discretionary (split) trust at outset. Unlike on conventional life insurance, this element is mandatory (and so avoids the all-too common situation of benefits not being written in trust, with all the knock-on implications of that).
Maximum cover is between 15 and 25 times salary, depending on age (compared to the more usual four times cover under group schemes).
The plan also includes free medical advice from Best Doctors and child bereavement counselling from Winston’s Wish. One interesting (discretionary) benefit is paying up to £300 for services that support the life insured or their family during a claim.
On leaving an employer, cover can be continued if taken over by the new employer.
What They Say
Managing director Darren Spriggs said: “Having launched Ageas Business Protection last year, which has been extremely well received, our relevant life insurance is the next stage in Ageas’ drive to provide protection for businesses, and is a welcome addition to our overall proposition.”
What We Say
"RLPs are simply a great way to buy individual term insurance if your employer is prepared to set it up. The big advantage is tax relief on premiums – the same advantage that buying life cover through a group pension scheme gives. We also like the fact that every policy must be written in trust to get those tax benefits. Far too many life policies are not written in trust (one of the great free benefits provided by most insurers and sadly under-used) but the RLP rules effectively avoid that happening.
"The downside is that the rules on RLPs have to be carefully followed and that product designers are limited in what add-ons they can offer. Here, Ageas Protect’s plan will pay out on terminal illness as well as on death (and without the usual exclusion during the last year of the policy). The Best Doctors’ and Winston’s Wish add-ons are a nice touch too, while the discretionary £300 available for support during a claim is not just a commendable human touch but one that can have a practical value for many people too.
"Moreover, the plan will appeal to those looking for very high levels of cover – much more than is traditionally included in group schemes.
"Buying term cover through a group pension scheme can still be the best option for many but, if that does not suit for any reason, an RLP is likely to be the way to go."