Ageas Protect Relevant Life Insurance
Ageas Protect Relevant Life Insurance
Ageas has entered the RLP market, offering relevant life insurance for employees outside a group scheme, but still allowing both employer and employee to benefit from tax reliefs. The employer and the employee must both be resident in the UK.
The policy pays a lump sum on death or terminal illness. The latter is defined as life expectancy being less than 12 months, as certified by the treating consultant. There is no final year exclusion. The plan can last to age 75 and is available to 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. There is also a facility to increase cover up to 50% in total up to a maximum of £75,000 on receiving 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 also be increased up to age 75. The maximum term is 50 years and the minimum is three years.
Policies must be written in a discretionary (split) trust at outset. This also avoids the all-too common situation of benefits not being written in trust, when they should be (writing a policy in trust can take time, especially if potential trustees cannot easily be contacted).
The maximum benefit is 15 to 25 times salary, depending on age. This compares to the more usual four times cover under group schemes and much lower average sums insured in the individual market.
The plan includes free medical advice from Best Doctors and child bereavement counselling from Winston’s Wish. Ageas also includes a discretionary benefit 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 only if the policy is taken over by the new employer.
Comment: We like RLPs. They enable employees to get the same tax benefits on life cover as pension scheme members do. We also like the idea of mandatory trusts because it means every policy is written in trust, so giving IHT advantages and ensuring that claims can be paid out quickly to the right people, without having to wait for probate.
The big downside (apart from ensuring each plan fully meets the rules on RLPs) is that benefits are limited. So, insurers cannot include critical illness cover for example. In practice though, Ageas looks to have gone about as far as it can in squeezing extra customer benefits into the plan. We especially like the very human touch of a discretionary £300 to give support if a claim is made. OK, the payment is discretionary, but it’s a nice touch and we trust Ageas to manage it responsibly and compassionately.
One other key point is the potential to have up to 25 times’ salary cover. That will be way above what most customers will choose but, where the need is there, this could be a useful selling point too.
Plus points: The best way to buy individual term cover for many, with tax relief on premiums; Every policy has to be written in trust to secure the tax benefits, which also means every customer gets the advantages of having their benefits in trust; Maximum benefit are high and there are some useful add-on benefits and increase options.
Not so plus points: RLPs are more complex than conventional term plans; RLP rules must be followed fully in order to secure the tax benefits; The plan is only available through employers and can only be transferred to a new employer if they agree.
Website: http://www.ageasprotect.co.uk.
Rating (max 10): Innovation: 9. Overall: 8. Gold
Tags: Ageas Protect; Term