Critical Illness Insurance

For an employed person, salary or earned income means:

This can include:

• > regular commission and bonuses received by you,

• > dividends received by you (and your spouse or co-habiting partner) from a private limited company in which you and not more than three other shareholders are employed as full time working directors.

The dividend amount used will represent your share (and your spouse's or co-habiting partner's share) in the net trading profit of that company from its normal, regular business, and must cease as a result of your disability, and/or the salary received by your spouse or co-habiting partner where they are employed by the same company as you. Their salary would need to be a nominal amount (up to a maximum  per year), and they would not contribute towards generating the profit of the company. The spouse’s or co-habiting partner's salary must cease on your disability.

Any salary, dividends or any form of private disability benefits being received by the spouse or co-habiting partner when you are disabled will be treated as continuing income for you for claims assessment purposes.

For a self employed person, salary or earned income means:

your share of pre-tax profit (after the deduction of trading expenses and adjustment for capital allowances) from your trade, profession or vocation for the purpose of schedule D cases I and II of the Income and Corporation Taxes Act 1988, in the 12 months prior to you becoming disabled.

Your salary or earned income will have been confirmed by HM Revenue & Customs or by the tax authorities in the relevant country for earnings outside the United Kingdom.

Income from savings and investment and benefits in kind (P11D) is not included in our definition of salary or earned income.

If you make a claim, insurers may average earnings over a different period, if in their reasonable opinion, your salary or earned income fluctuates significantly and using a different period would give a better indication of your usual earned income.

When you take out your benefit, you can choose the deferred period you want:

four, 13, 26 or 52 weeks.

The deferred period is the period during which an insured person must be ill or disabled before insurers will pay any benefit. With a longer deferred period your premiums are lower.

As insurers will also include premium payment benefit (sickness, accident or disability), the deferred period for this benefit will be the same as the deferred period you choose for disability income benefit (sickness, accident or disability), unless you show otherwise on your Application Form.

Insurers will ask you to fill in a claim form when you make a claim. This will ask you for details of your condition and of any income that you receive, for example from other income protection plans. Insurers will also need medical information as evidence.

Insurers will pay your benefit until the first of the following events happens:

• > In our reasonable opinion, you recover

• > You reach the end of your benefit term

• > You die.

The maximum age at the end of the benefit term is 65 and your benefit will end on the benefit anniversary after you reach age 65 (or the first life to reach 65 if you choose a joint-life benefit).

The annual amount of disability income benefit will be restricted to 50% of your pre-disability annual salary or earned income. This amount may be reduced if you continue to receive income from employment when we pay the benefit or if you are receiving income from other private disability benefits.

If when we accept your claim, there is medical evidence to certify that there is no possibility of recovery, we may, as an alternative to the payment of monthly disability income benefit, convert your income benefit to a one-off lump-sum benefit. Once this payment has been made, the disability income benefit will cease.

If you return to work on reduced hours or to a lower paid job after we have accepted a disability claim, we may continue to pay a benefit to you at a reduced rate taking account of the salary or earned income you will be receiving from employment. 

If you have a renewable disability income benefit and a claim is in payment when your benefit is due for renewal, we will allow you to renew your benefit in the normal way and your claim will continue subject to our standard claims procedures set out in the Policy

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