In detail

What benefits are available?

You can choose between:

• Life Cover - can pay out a cash lump sum if you die or are diagnosed with a terminal illness within the policy term.
• Critical Illness with Life Cover - can pay out a cash lump sum if you are diagnosed with a critical illness, if you die or are diagnosed with a terminal illness, whichever happens first within the policy term.
• Lifetime Cover - can pay out a cash lump sum when you die, or if there are two people covered, when the last person dies.

What is life cover?

Life cover is a way of helping to ensure that your dependants are financially provided for if you die or are diagnosed with a terminal illness. The benefit amount can either be level, increasing or decreasing depending on your personal circumstances.

See Key Features of Life Cover (pdf: 103kb) for more information.

Do I need life cover?

There are several reasons why life cover may be important to you.

If you die or are diagnosed with a terminal illness it can help:

• provide for your partner, family or dependants
• pay off your mortgage or other outstanding loans

How does life cover work?

Each month, you pay an amount for the period you have chosen to be covered for. The cash sum you are covered for is known as the benefit amount, your monthly payment is known as a premium and the period you're covered for is known as the term.

The policy will end if we pay out the benefit amount. If this amount has not been paid out by the end of the term, the policy will end and you will get nothing back. The policy has no cash-in value.

Full details on how Life Cover works are given in the Policy Provisions. A hard copy is also available on request.

How is terminal illness defined?

If you have selected life cover, terminal illness cover is automatically included.

A terminal illness:

• is an illness that is expected to cause death within 12 months and before the end of the policy term
• results in the benefit amount being paid out on a valid claim
• ends the policy if the benefit amount is paid out

Please note:

• claims for terminal illness are not valid if we receive notice of the illness less than twelve months before the cover ends.
• terminal illness cover is completely different from critical illness cover as you can survive a critical illness.

Can I choose who gets the payout if I die?

Yes, you can nominate who you would like as a beneficiary. You may also wish to write your policy under an appropriate trust for the benefit of anyone you specify. We will automatically issue you a trust form with your policy documents should you wish to do this.

Find out more about putting your policy in trust.

I'm not sure how much life cover 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
• if you have children going to university and when they would graduate
• the size of your mortgage and how long it's got to run
• any other outstanding loans or debts you have
• how much you want to pay each month.

What is Lifetime Cover?

Lifetime Cover can help ensure that there’s money in place to pay for bills or unexpected expenses when you die. The benefit amount can either be level or increasing, depending on the financial commitment you wish to protect.

See Key Features of Lifetime Cover (pdf: 141kb) for more information.

Do I need Lifetime Cover?

There are several reasons why Lifetime Cover may be important to you. It can help:

• provide a cash sum  to help pay for bills or unexpected expenses when you die
• ensure that you’ve taken care of things for when you die

How does Lifetime Cover work?

Lifetime Cover is life cover which lasts until you die. You pay an amount each month until you reach age 90. After age 90, your cover continues but you don’t pay any further premiums. You can take the policy out on a single life basis or with two lives assured.

The cash sum you are covered for is called the benefit amount and it’s paid out when you die (single life basis), or if there are two people covered, when the last person dies (two lives assured). The policy has no cash-in value at any time.

Lifetime Cover for benefit amounts of £15,000 or less

If you take out a Lifetime Cover policy for a benefit amount of £15,000 or less on a single life basis, you’ll be accepted for cover in almost all circumstances*. The application process is simple with no medical**.

For some customers, an exclusion may apply so that if you die in the first two years of the policy starting, unless it’s an Accidental Death as defined in the Policy Provisions, we won’t pay the benefit amount but will return the premiums you’ve paid under the policy.

* To be accepted for cover you must be aged between 18 and 74, resident in the UK and have a UK bank account.

** As with all our contracts, we carry out random checks of recently started Lifetime Cover policies so if your policy is chosen, you’ll be asked within 30 days to undergo a medical examination. If, as a result of this examination, we find out that you’ve failed to tell us about a piece of material information, we can change or even cancel your policy.

What other options can I have with Lifetime Cover?

Increase Option

When you take out the policy, you can choose to automatically increase your benefit amount each year in line with the Retail Prices 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.

Please note:
Each year you’ll  be offered the chance to decline the increase for that year but, if you decline it two years in a row, increases will no longer be available to you on that policy.

Premium Protection

When you take out Lifetime Cover, you can choose to include Premium Protection at an extra cost. This option means that after a wait of 26 weeks, we’ll start to pay your premiums ourselves if you suffer what we would define as a “Disability”.

We’ll continue paying the premiums for you until:

• You’re able to return to work, or
• You reach the age of 66, or
• The policy ends,

whichever is sooner.

Please note:  Premium Protection is not available on policies with a benefit amount of £15,000 or less.

You can find more information about the Increase Option and Premium Protection, including how we define “Disability”, in the Key Features of Lifetime Cover. Full details are in the Policy Provisions. A hard copy is also available on request.

What is critical illness cover?

Critical illness cover is a way to help you and your family financially should you be diagnosed with a specified critical illness. See What illnesses are covered by critical illness cover?

Critical Illness with Life Cover can pay out a cash lump sum if you die or are diagnosed with a terminal or critical illness before the end of the policy term. The benefit amount can be level, increasing or decreasing.

The policy will end if we pay out the benefit amount. If this amount has not been paid out by the end of the term, the policy will end and you will get nothing back. The policy has no cash-in value.

The premiums you pay for this benefit are reviewable every 5 years and can change. See the Key Features of Critical Illness with Life Cover (pdf: 257k) for more information.

Why might I need critical illness cover?

You are 2.5 times more likely to have a critical illness than die before age 65*. The good news is that medical advances mean that many serious illnesses may not prove fatal. However, they can still have a major impact on your life and on your ability to earn a living. Scottish Widows research has shown that only 29% of parents have a policy which would pay out if they were to suffer from a critical illness.**

Critical illness cover can reduce the financial impact of a critical illness by helping with practicalities such as helping to pay off your mortgage and helping to pay any bills, allowing you the time to recover.

At the 40th anniversary of the first heart transplant, Dr Marius Barnard talks about his work as a pioneering heart surgeon and how he developed critical illness cover.

(*source : Financial Times, January 2004)
(**source : Scottish Widows Research, May 2006)

Children's critical illness cover

If you choose Critical Illness with Life Cover then children's critical illness cover is automatically included.

• This can pay out a cash lump sum if your child is aged between six months and 21 years and is diagnosed as suffering from one of a range of specified critical illnesses (this excludes Total Permanent Disability) within the policy term and is still alive after 14 days. Please read the Critical Illness with Life Cover Key Features (pf: 257k) for further information.
• Payment is limited to the lower of £25,000 or 50% of the amount payable under the policy. A maximum of £25,000 for each child diagnosed as suffering from a critical illness will be paid regardless of the number of critical illness policies purchased and in force with the Scottish Widows or Lloyds TSB group.
• Any children’s claims you make will not affect your own level of cover.

What illnesses are covered by critical illness cover?

We cover the illnesses recommended by the Association of British Insurers (ABI) Statement of Best Practice for Critical Illness Cover, which are:

• Alzheimer's disease - resulting in permanent symptoms
• Aorta graft surgery - for disease
• Benign brain tumour - resulting in permanent symptoms
• Blindness - permanent and irreversible
• Cancer - excluding less advanced cases
• Coma - resulting in permanent symptoms
• Coronary artery by-pass grafts - with surgery to divide the breastbone
• Deafness - permanent and irreversible
• Heart attack - of specified severity
• Heart valve replacement or repair - with surgery to divide the breastbone
• HIV Infection - caught in the UK from a blood transfusion, a physical assault or at work in an eligible occupation*
• Kidney failure - requiring dialysis
• Loss of hands or feet - permanent physical severance
• Loss of speech - permanent and irreversible
• Major organ transplant
• Motor neurone disease - resulting in permanent symptoms
• Multiple sclerosis - with persisting symptoms
• Paralysis of limbs - total and irreversible
• Parkinson's disease - resulting in permanent symptoms
• Stroke - resulting in permanent symptoms
• Third degree burns - covering 20% of the body's surface area
• Traumatic head injury - resulting in permanent symptoms

* The eligible occupations for HIV caught at work are:

• The emergency services - police, fire, ambulance
• The medical profession - including administrators, cleaners, dentists, doctors, nurses and porters
• The armed forces

We also cover some additional critical illnesses, which are:

• Bacterial meningitis - resulting in permanent symptoms
• Bone marrow failure - permanent and irreversible
• Creutzfeldt-Jakob disease (CJD)
• Progressive supranuclear palsy
• Total permanent disability

The heading of each critical illness is only a guide to what is covered. For example, some types of cancer are not covered. Further details on how your critical illness claim will be considered, including the full definitions we'll use, and the evidence we'll need, are given in provision 5 of the Policy Provisions. A hard copy is also available on request.

The illnesses listed here are an indication of those offered to customers applying directly to Scottish Widows and who are accepted on standard terms. Special terms may be applied to individual cases.

What next?

Go to choosing your cover to find out more about the other options available.

Otherwise, please Contact us.