Protection specialist LifeSearch has teamed up with Fortis, the new entrant to the UK protection market, to launch Real Life Cover, a unique product designed to revolutionise the market.
In an ideal world, everyone who needs protection would own comprehensive policies - including Life, Critical Illness Cover and Income Protection cover - but very few people actually have the money, knowledge or the inclination to buy these products.
Real Life Cover combines seven protection covers, plus the added option of Unemployment Cover, in one package, and will protect people financially against almost any serious eventuality.
Real Life Cover is designed to be simple and comprehensive. It is affordable, easy to set up and cuts down on a lot of the confusion that consumers experience when faced with an array of insurance choices and complex jargon.
Real Life Cover protects against the real risks of modern life within one plan and is made up of two same-size pots of money: the Life Fund and the Living Fund.
The Life Fund
If you die or are diagnosed with a terminal illness during the term of the policy, it will pay you out a lump sum of your choosing. This works exactly the same way as Life Cover and is separate to the Living Fund.
The Living Fund
This has four elements to it: Income Cover, Critical Illness Cover, Child and Partner Carers Cover, Recuperation Cover:
Income Cover: if you are unable to work because of illness or injury your living fund pays you a monthly amount of 1% of your current sum assured, which in total provides cover for up to 8 years.
Critical Illness Cover: If you have a heart attack, stroke or get cancer; the three illnesses that make up around 80% of all critical illness claims; it advances a year’s worth of benefits by paying you an advanced lump sum of 12% of your current sum assured, as well as the monthly income if you cannot work.
Child and Partner Carer’s Cover: If you are unable to work because you have become a registered carer for your child or partner you also get 12% of your current sum assured advanced.
Recuperation Cover: A lump sum of 3% of your current sum assured to pay for physiotherapy or counselling to help you recover from an illness or disability and get back to work.
You can make as many claims as you need to, as long as there is still money left in your fund. Whenever the fund is paying you a monthly amount your premiums are paid for you - it does not come out of your fund. Your Life Fund is never affected by any claims you make on your Living Fund, so you still get the full amount on death or terminal illness.
Crucially, if a claim does not meet the definition for Critical Illness, the income claim will pay out instead, as long as the claimant cannot work.
All premium rates are guaranteed and for all occupations covered ability to work is based purely on Own or Suited Occupation definitions, except for Housepersons cover.
For those who are worried about the safety of their jobs at this time of economic uncertainty, there is the optional extra of Unemployment or Extended Carer’s Cover. If you are made unemployed through no fault of your own, or you give up work to become a registered carer for a parent or parent-in-law, you get 1% of your Living Fund every month for up to one year.
Tom Baigrie, LifeSearch Managing Director, says: “Consumers need more than life assurance. Real Life Cover provides more effective protection against almost every eventuality that can destroy your finances. Everyone who does not already have full disability and life benefits should consider Real Life Cover, it is easy to follow and is built to be failsafe and clear.”
Life insurance: News update: July 2008