Scottish Widows’ welcome return to the intermediary protection insurance market offers life cover, with or without critical illness insurance. Term insurance (including family income benefit), relevant life cover (life cover only) and whole life cover are offered.
Using a purpose-built digital platform, advisers have access to a range of tools to help them write protection business. That includes calculators for each product and protection needs, risk analyser and underwriting tools. The underwriting tool gives an indicative underwriting decision for some of the most commonly disclosed illnesses and conditions. There is a good section on trusts too – no less than 15 documents, including a useful 12 page trust overview document.
Our review focuses on term life with critical illness (CI) cover. This plan offers cover on a level, increasing (in line with RPI between 2% and 10% a year) and decreasing (to protect a repayment mortgage with a selected interest rate between 0% and 18%) bases. Minimum term is one year (three years for decreasing term) and cover must cease by age 69. The plan is available from age 18 to 64 at outset (higher maximum ages apply for life cover only) and minimum and maximum sums insured are £100,000 and £3m (£1.5m with total and permanent disability [TPD] cover, or up to £25m for life cover only). Maximum family income benefit is £150,000 a year (level or increasing cover only). Children are covered free for both life and CI cover.
Forty two critical illnesses are covered (including TPD) plus 12 additional conditions (which pay the lower of £25,000 and 25% of the sum insured) and terminal illness cover is included at no extra cost. The independent CI Expert service reports that anoxia/hypoxia causing death of brain tissue due to inadequate blood supply and also carcinoma in situ of the endometrium treated by hysterectomy are both unique to Scottish Widows.
A life cover buyback option is available as is a five year renewable cover option. Personal and business plans are available. Premiums are guaranteed throughout.
Free accidental death cover (up to 90 days pre-offer) and mortgage cover (again up to 90 days) provide greater peace of mind and some protection during the underwriting process.
Support is provided though RedArc, both when a claim is made and beyond.
What They Say
Head of intermediary protection propositions, Esther Dijkstra, said: “Protection insurance can make a real difference to people and businesses when they encounter some of life’s most difficult situations. Offering a full range of protection products which can be tailored to meet specific individual requirements, alongside extensive emotional support from our partners at RedArc, means that some of the stress can be removed from those difficult situations.”
What We Say
"Scottish Widows’ re-entry into the protection insurance market looks to have been carried out thoroughly. In fact, protection products were already available through Lloyds bank branches [curiously, the critical illness definitions do not appear to be identical], but its long delayed move back into the IFA space will be welcomed by a lot of intermediaries.
"The range of products offered is quite comprehensive and, on the life +CI plan we have looked at, there are a number of options to tailor the cover to the individual’s needs. A very thorough approach has been taken to areas such as digital processing, underwriting and trusts – all areas where advisers need good and easy to follow help.
"Cover looks to be competitive but, as always, pricing and service standards will be key too. Overall though, Scottish Widows is a very welcome returnee to the protection sphere and its brand awareness should be an asset too."