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Are you looking for an insurance policy that covers both life and significant illness? Aviva’s Relevant Life Insurance with Significant Illness Cover might be just what you need. This policy provides comprehensive coverage in the event of death or serious illness, giving you and your family peace of mind during difficult times. Read on to find out more about this unique and comprehensive insurance policy.
The Aviva Relevant Life Insurance with Significant Illness offers a wide range of benefits for those seeking comprehensive cover for themselves or their loved ones. It includes life cover, where the insured individual’s beneficiaries receive a lump sum payout upon their death. It also covers a range of major illnesses, so if the insured person is diagnosed with one of these illnesses they are eligible to receive a cash lump sum payment to help them cope financially with the diagnosis. In addition, Aviva also provides additional benefits such as funeral costs and legal expenses cover, making it one of the most comprehensive policies available on the market today.
Relevant life insurance policies have often only offered a death benefit and a terminal sickness benefit in the past. But now with Aviva’s Relevant Life policy there is also the option to include an employee serious illness benefit.
Both internal and external legal counsel have done a lot of investigation into whether an employee’s serious sickness benefit should be included as Relevant Life Insurance. But Aviva now claims to have HMRC in agreement that their policy qualifies as a relevant life insurance product.
When an employer creates a death or retirement benefit plan for an employee (that isn’t a registered pension plan), the plan will often be taxed under the Income Tax (Earnings and Pensions) Act of 2003 (“ITEPA”) as an employer-financed retirement benefit plan.
However, S.393B(3) ITEPA states that the following advantages are excluded from that definition:
a) benefits in respect of ill-health or disablement of an employee during service
b) benefits in respect of the death by accident of an employee during service
c) benefits under a relevant life policy, and
d) benefits of any description prescribed by regulations made by the Board of Inland Revenue.
Other than the normal tax benefits or relevant life insurance and death benefits, Aviva’s policy also covers significant illness. This means it is the only UK company to offer Relevant Life Insurance with a form of critical illness.
What Conditions are covered by Aviva’s Life & Significant Illness?
Advanced cancer – of specified severity
• Aplastic anaemia – with bone marrow failure
• Bacterial meningitis – resulting in permanent symptoms
• Benign brain tumour – resulting in permanent symptoms
• Benign spinal cord tumour – resulting in permanent symptoms
• Brain injury due to anoxia or hypoxia – resulting in permanent symptoms
• Creutzfeldt-Jakob disease
• Dementia – resulting in permanent symptoms
• Encephalitis – resulting in permanent symptoms
• Intensive care – resulting in permanent symptoms
• Kidney failure – requiring permanent dialysis
• Liver failure
• Major organ transplant – from another donor where applicable
• Motor neurone disease – resulting in permanent symptoms
• Multiple sclerosis – with persisting symptoms
• Neuromyelitis optica – with persisting symptoms
• Parkinson’s disease – resulting in permanent symptoms
• Parkinson’s plus syndromes – resulting in permanent symptoms
• Pneumonectomy
• Psychosis and bipolar affective disorder – of specified severity
• Pulmonary arterial hypertension – of specified cause and severity
• Respiratory failure – of specified severity
• Severe heart condition – of specified severity
• Spinal stroke – resulting in permanent symptoms
• Stroke – resulting in permanent symptoms
• Systemic lupus erythematosus – of specified severity
• Third degree burns – of specified severity
• Traumatic brain injury – resulting in permanent symptoms
Total & Permanent Disability is also available as an extra under the policy.
Any definition from a payout must hit the below criteria:
“We’ll pay this if the life covered meets the definition for one of our defined employee significant illness conditions during the policy term, survives for at least 10 days, and the condition results in the retirement or anticipated retirement of the
life covered”
The only option in the UK market for a relevant life policy with illness coverage is Aviva’s Relevant Life with Significant illness. However, it should be noted that the coverage is less thorough than other critical illness contracts. Therefore, it really is up to each person to weigh the savings against the level of coverage. Having said that, why wouldn’t an employee be happy with minimal illness coverage than none at all for employers offering pertinent life insurance?
Alternatives would be key man insurance which can inlude full critical illness cover but of course any benefit is paid to the company and not to the persons family.
Feel free to speak to one of our advisors for more information.
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