QFA Life assurance 3-4

Lump sum cover

Pays out a lump sum in the event the life assured is diagnosed with or developing a serious illness specified in the policy

Income protection

pays out a regular sum typic in return for a premium if the life assured is deemed unable to work due to illness or disability lasting longer than the deferred period of time ie -13 to 26 weeks

Lump sum cover types

• Accelerated cover (Life + Serious Illness)

• Stand-alone Cover

• Double cover (Mutually exclusive Illness & Life cover)

Certain serious illness

where the full sum is payable

less serious illness

Where a partial sum of the cover is payable as outlined in the policy, this is a partial payment

Accelerated Cover

Where the first of two events is to occur the payment is made only once, ie- if the life insured was to get seriously ill as defined by the policy the policy will pay out the policy but then not again on death

Partial Accelerated Cover

Where the sum payable is different between the life assurance and serious illness cover, the lesser amount will be deducted (ie- sickness) from the total sum ie- sickness = 50,000 & life = 170,000, where the serious illness is claimed only 120,000 will remain in the instance of death.

Standalone Cover

There is no or a nominal amount of life cover provided

Double cover

Pays out a standalone serious Illness and life assurance cover within the same policy

PTD Permanent Total Disability

Meaning permanently unable to follow any occupation, while their may be an ancillary option for the insured’s speciifc occupation

IP Income Protection

Pays out a regular income at a percentage of the life insureds annual income ie -75%, if the insured is deemed unable to work due to illness or disability

Where income protection provides tax relief where are taxes imposed?

Taxes are notably imposed on the sum paid out on a regular basis when claimed as though it were earned income

Proportionate Benefit

Insurance companies may incentivise claimaint’s to return to work by offering a portion of the IP as payment as the life insured resumes work for a period

Loss of Independent Existence

Where a life insured is unable to carry out basic human functions such as feed, clean or manage daily tasks