Zurich Level Protection—Convertible and Renewable Term options
Zurich has added renewable term and convertible term options to its guaranteed rate Level Protection Plan. The two new options are:
• Convertible Term. An additional cost option available if the plan has life cover only, this option allows the life assured to convert some or all of the life cover into a new whole of life plan, which then provides lifetime protection on a guaranteed payment basis and also pays on diagnosis of terminal illness). If the plan is joint life, the new plan can be either first (to give maximum protection and earliest payout) or second death (for IHT planning, for example). The convertible option can be exercised up to age 69 (first death) or 83 (second death).
• Renewable Term. Again an additional cost option, this enables the customer to renew the plan for a further term at the end of the original term. The option falls away on the life assured’s 70th birthday. On the last renewal, the new term can be up to age 74 if the plan includes life and critical illness cover, or 84 if life cover only (i.e. cover must cease by age 75 or 85).
Zurich has also introduced a number of underwriting enhancements, increasing its automatic medical evidence threshold from £600,000 to £750,000 and its GPR (General Practitioner’s Report) limit to £1m. Nurse screening examinations now replace GPRs for applicants up to age 40, while automatic HIV testing has been dropped for applicants over age 60 too.
The basic plan offers guaranteed or reviewable plans which can run to age 85 (75 for reviewable plans and those with critical illness cover included). Applicants must be 16 or over, up to 83 at outset (lower if CI or payment protection benefits are included). Minimum premium is £5 a month (or £50 a year). Indexation and waiver can also be added as can guaranteed insurability increases.
Plus points: Renewability and convertibility are due a revival—both can have a place in planning; The underwriting improvements are welcome too.
Not so plus points: Both options cost more, which is wasted money if the options are not exercised.
Website: http://www.zurich.co.uk.
Rating (max 10): Innovation: 7. Overall: 7.5. Silver.