Access Keys



Protection for Life: Critical Illness with Life Cover

  1. Overview
  2. In detail
  3. Cover options
  4. Best Doctors
  5. FAQs
  6. Apply
  7. Get a quote
  8. How to claim

Critical Illness with Life Cover options

Choosing your cover options

There are a number of cover options and free cover options to choose from. You also have the option to put your policy in a trust.

How much cover might I need?

It depends on your personal circumstances. Some things you may want to consider are:

  • how much your family would need to support themselves without your salary
  • the size of your mortgage and how long it’s got to run
  • any other outstanding loans or debts you have
  • the amount you want to pay each month.

Cover options

Cover option Definitions Please note
Level cover this means that the benefit amount and your premiums remain the same throughout the benefit term and can be used, for example, to protect an interest-only mortgage.  
Decreasing cover this means the benefit amount will reduce each month similar to the way a loan or repayment mortgage works. If the benefit is to cover a repayment mortgage or loan, we will decrease the benefit amount each month assuming a fixed rate of interest of 10% a year. There may be insufficient funds to repay the loan if the interest rate on the mortgage exceeds 10% or the loan is increased or extended.
Increasing cover this means that the benefit amount automatically increases each year in line with the Retail Price Index (RPI). The increases will be at least 2% up to a maximum of 10%. At the same time, your premium will increase at a higher rate than the increase in benefit amount.  
Premium Protection Premium protection on a policy gives you cover for your premiums so you don’t have to pay them if you suffer a disability which leaves you unable to work. We will start to pay the premiums for you after 13 weeks. This option can only be added, at an additional cost, at the time you take out the policy. We will continue to pay the premiums until you return to work, reach age 66, or the policy ends, whichever is sooner. This helps to safeguard your policy and your protection.

If you choose Critical Illness with Life Cover, your premiums are reviewable every 5 years.

Please refer to the Key Features for further details.

Free cover

We will only pay once under any type of free cover in respect of the same person. The policy will end if we pay out the free cover amount.

To be eligible for our 90 Days’ Mortgage Free Cover or our 30 Days’ Free Accidental Death Cover, you must:

  • be aged 59 or under when you apply
  • be a UK resident (meaning England, Wales, Scotland, Northern Ireland but not the Isle of Man or the Channel Islands), and
  • not have, or be in the process of applying for, similar cover with another insurance company
Free cover options What are you covered for? When does the cover end?
90 Days’ Mortgage Free Cover

You will be covered instantly from the date we receive your fully completed application, direct debit instruction and you’ve exchanged contracts (concluded missives in Scotland).

This means we could pay the initial amount applied for up to a maximum of £250,000 on death, terminal illness or critical illness, depending on which of these you have applied for.

Any claim must meet the claims criteria for both the benefit applied for and the 90 Days’ Mortgage Free Cover.

Mortgage Free Cover continues until the earlier of:
  • the start date of the policy applied for
  • the date any claim is made
  • the date on which we inform you of whether or not we accept the application
  • 90 days after we receive the application
See our Mortgage Free Cover guide for more details.
30 Days’ Free Accidental Death Cover

Free Accidental Death Cover will only apply if your application is referred to Scottish Widows for an underwriting decision. The 30 day free cover period starts from the date we receive your fully completed application and direct debit instruction.

If an accident happens within this 30 day period, and you die within 60 days of the date of the accident, we could pay out the initial amount applied for up to a maximum of £250,000 if the claims criteria for both the benefit applied for and 30 Days Free Accidental Death Cover are met.

Accidental Death Cover continues until the earlier of:
  • the start date of the policy applied for
  • the date any claim is made
  • 30 days after the start date of Free Accidental Death Cover
See our Free Accidental Death Cover guide for more details.

Putting your policy in Trust

A trust is a way of transferring ownership of your assets. If you have assets over, or close to, the inheritance tax (IHT) threshold and you don’t want to simply gift everything away, one of the best ways to potentially reduce IHT liability is to put these assets in trust. However, trusts are usually set up on an irrevocable basis, which means they cannot be torn up and rewritten like a will.

There are three sets of people involved in a trust:

  • The settlor – that’s you: the person who sets up the trust.
  • The trustees – these are the people you entrust to administer the trust and look after the interests of the beneficiaries. It requires a degree of responsibility and the settlor would usually be one of the trustees.
  • The beneficiaries – these are the people who will benefit from the trust.

When setting up a trust you need to choose these people carefully.

What is the benefit of putting Protection for Life in trust?
The advantages of putting some or all of your Protection for Life policies into trust are:

  • You could drastically reduce potential IHT, yet still keep some control. This is because the proceeds of your policy in trust will not normally form part of your estate.
  • In the event of your death, your life cover can be distributed more quickly to your beneficiaries, rather than going into your estate, where it could not be distributed until probate (or confirmation in Scotland) had been granted. This is as long as you appoint at least one additional trustee, who survives you and so can administer the trust after your death.
  • If the intended beneficiary is a minor or someone unable to look after his or her own finances, a trust will help ensure that he or she will receive control of the funds only when the time is right.
  • With our Flexible Power of Appointment Trust, the trustees have some flexibility to change the beneficiaries if circumstances change in the future.

Are there any disadvantages to putting the policy in trust?

  • You must have the correct type of trust to make sure that it will do what you want it to do.
  • You must make sure that the trust is written correctly – other benefits such as critical illness or terminal illness could go to the beneficiaries instead of you.
  • Once a trust has been set up, it can be difficult to change, especially if you’re no longer in contact with one or more of the trustees.
  • In certain unusual circumstances, the trust could become subject to IHT at up to 6%. For further information on this issue, please seek specialist advice from a financial adviser or solicitor.
  • If you have Critical Illness with Life Cover and are diagnosed with one of the specified critical illnesses but decide not to claim, an amount equal to the policy proceeds could become subject to IHT at up to 40% if you subsequently die.
  • You should take advice from someone who is an expert in setting up a trust. A solicitor will be able to advise you fully.

The value of any tax advantages will depend on your personal circumstances which may be subject to change in the future. Remember tax rules can also change.