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Protect your clients' business against loss of a key individual

Key Person Cover

This cover provides a financial safety net if a key member of staff dies or is diagnosed with a serious illness (if Critical Illness Cover is also selected). The claim is paid directly to the company or partners, allowing breathing space to help keep the business trading as normally as possible.

Features included as standard

  • Pays a cash lump sum if they key person insured dies
  • Terminal illness cover included at no extra cost
  • Guaranteed premiums

Options

  • Critical Illness cover
  • Level, decreasing or Inflation-linked cover
  • Waiver of premium

Additional services

  • Access to the LV= member helpline gives 24/7 access to health advice, counselling services and expert legal advice
  • LV= Doctor Services which gives gives your clients access to 3 expert medical advice services through one handy app wherever they are
  • LV= Business Care which gives your clients free access to legal and tax experts available at the end of the phone, when they need them

A closer look...

Losing a key person can be disastrous for the long-term survival of a business. Although clients can’t predict the future, Key Person Cover can protect against the following business risks:

Protect profits

  • Recruitment costs to find a suitable replacement
  • Loss of profits whilst the business is disrupted
  • Paying penalties for non or late delivery on goods and services
  • Paying any company sick pay to the key person if the claim is related to a critical illness

Protect debts

  • Being unable to repay a loan
  • Paying back a business overdraft
  • Nervous suppliers may demand payment of an account up front
  • Covering owed salaries, dividends or loaned money through a director's loan account
  • Key Person Cover can protect sole traders who are personally liable for business debt. If they died expectantly, any debt would be inherited by their next of kin.

If the key person insured is diagnosed with a terminal illness, their priorities may change and could decide to stop working and concentrate on the things that matter to them the most- family, missed life experiences or even just be too unwell to work. When this happens we'll pay the sum assured early.

What is a terminal illness?

This is an incurable illness, where in the opinion of an attending medical consultant and our Chief Medical Officer, they would not be expected to live for more than 12 months, as long as it's not in the last 12 months of the plan.

The premium is guaranteed. This means we won’t change it unless you ask us to change the policy or, unless you inflation-linked cover has been chosen.

Inflation-linked cover your cover will increase by inflation each year and premiums will increase by inflation multiplied by 1.5.

All of our features are covered in full in our policy documentation.

Details

Life Protection

Life and Critical Illness cover

Waiver of Premium

Additional features

N/A

  • Children's critical illness cover
  • LV= Legal & Wellbeing line
  • Business Protection cover

N/A

Type of pay-out

Lump sum

Lump sum/s including our additional payment claims

Pays your plan monthly premiums after the waiting period

Types of cover

Level/inflation-linked/decreasing

Level/decreasing/inflation-linked

N/A

Term

Between 5 and 45 years

Between five and 40 years

Age 69 or the end of the plan term if earlier

Minimum age attained at entry

17 years

17 years

17 years

Maximum age attained at entry

59 years

59 years

59 years

Maximum age attained at end of policy term

84 years

69

69

Minimum premium

£5 a month

£5 a month

Based on the total plan premium

Waiting period

None

N/A

6 months

Eligibility criteria

Your client must be a permanent UK resident

Your client must be a permanent UK resident

Your client must be a permanent UK resident

Number of Critical Illnesses covered

N/A

64

N/A

Cover by business type

Key Person Cover should be set up differently to match the needs of different business types. The table below can help show how Key Person Cover is best applied and how to get the most out of our policy.

Who should be insured

Business owner or key member of staff

Benefits (separate policies should be set up to protect profits or clear debt)

If the key person is an employee (not the business owner) the cash injection helps the company protect profits or clear existing debt.

How to set up the cover

Own life: the sole trader takes out the plan which is written in trust with their family/next of kin as the beneficiaries. If the sole trader dies, the money is paid to the beneficiaries (usually family or next of kin).

Life-of-another: sole traders can also take out Key Person Cover on an employee. The sole trader takes out the policy on a ‘life-of-another’ basis. Any claim is then paid directly to the sole trader.

Who should be insured

Partner or key member of staff

Benefits (separate policies should be set up to protect profits or clear debt)

If one of the partners dies or has to take early retirement due to ill health, the remaining business owners would be responsible for any debt. Key Person Cover can be used to pay off the debt or keep the business operating.

If the key person is an employee (not the business owner) the cash injection helps the company protect profits or clear existing debt.

How to set up the cover

Own life: if the key person is a partner, the plan is on their own life, written in trust for all the partners. Any claim is then paid to the remaining business owners (through the trustees).

Life-of-another: if they key person is an employee, one of the partners takes out the policy on a ‘life-of-another’ basis, placed under trust for the benefit of all the partners.

Who should be insured

  • Shareholder, or key member of staff
  • Partner or key member of staff

Benefits (separate policies should be set up to protect profits or clear debt)

The proceeds give the company a cash injection, which can be used to either:

  • protect profits
  • clear debt

How to set up the cover

Life-of-another: the company takes out the policy on a ‘life-of-another’. If a claim’s made, the money is paid directly to the company.


How much cover

Once you've helped your client identify their key people, you need to recommend a reasonable amount of cover for the Life or Life and Critical Illness policy. There are a number of options you might want to consider as well as using our Key Person Cover calculator.

The following options are suggestions and will depend on individual circumstances

Once you've helped your client identify their key people, you need to recommend a reasonable amount of cover for the Life Insurance policy or Life and Critical Illness policy. There are a number of options you might want to consider as well as using our Key Person Cover calculator.

Multiple of profits (to protect business profit)

  • Decide whether to base this on gross profit or net profit. As a guide you could consider either 2 x gross profit or 5 x net profit.
  • Normally you would look to use gross profit for key people who directly influence money coming into the business (such as sales staff).
  • Normally you would look to use base net profit on key people responsible for managing cash flow (such as a managing director).
  • Where there’s more than one key person, you need to split the cover according to each person’s contribution.

Multiple of salary (to cover replacement/recruitment costs)

  • As a guide, suggest cover between 7-10 x gross salary for key people who don’t own the business.
  • You might want to also include employment benefits (car allowance for example).

Loan security (to pay off debt)

You can base the cover on any loans, business overdrafts and other relevant lending.

Recruitment costs

  • Look at the cost of recruiting and training a replacement, as well as how long it would take for them to get up to speed in the role.
  • There will inevitably be a delay between the replacement arriving and making an appropriate contribution to the profits.

Business start up

It can be trickier to work out how much cover to recommend to a new business. One approach is to look at the working capital at risk compared to the key person's proportion of this risk. Feel free to contact our underwriters for further guidance.


Case studies

Losing a key person can be disastrous for the long-term survival of a business, large or small, and although clients can’t predict the future, Key Person Cover can protect against being unable to repay creditors and investors.

The example below shows how Key Person Cover can be used to help clients who want to secure the repayment of a business loan if something happened to one of their key employees. Please note that this is an example only and is not based on a real company.

Nicole

Nicole
Employee/Key Person

MN Engineering LTD

The company takes out a business loan and the shareholders want financial protection to help them pay back the debt if Nicole, who is key to sales, were to suddenly die or be diagnosed with a serious illness.

Mark and Sam

Mark and Sam
Shareholders

green arrow pointing down
Green tick in a circle

Scenario 1

The company takes out Key Person Cover on Nicole's life to cover debt repayments.

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  1. Nicole is involved in a car accident and dies.
  2. The company makes a claim and the £150,000 benefit is paid straight to the business.
  3. The money is used to clear the business loan.
  4. The proceeds give the company (and owners) the breathing space and time they need to come to terms with the loss to the business and find Nicole's replacement.
Red arrow pointing down
Red cross in a circle

Scenario 2

The company doesn't take out Key Person Cover (for debt).

Red arrow pointing down
  1. Nicole is involved in a car accident and dies.
  2. Sales are impacted immediately and the company are unable to pay back the loan.
  3. The bank calls in the debt and instruct the company to pay back the loan in full.
  4. The company are unable to pay back the loan in full.
  5. The business ceases trading.

  • Clients - Mark and Sam
  • Joint shareholders in a limited company
  • Business loan of £150,000
  • Single key person integral to new business

Mark and Sam are shareholders at MN Engineering Limited, a growing business specialising in high precision components for the defence and automotive sectors. They both manage the day to day running of the business and also employee a sales manager, Nicole, who brings in the majority of new business. They want to expand and invest in more equipment but due to a lack of available funds, they need to take out a business loan of £150,000.

Mark and Sam realise how important Nicole is to the company’s long-term survival and understand if she were to die, or be diagnosed with a serious illness, the business would be at real risk of defaulting on the loan due to the impact on the business Nicole brings into the company.

Concerned, they speak to their financial adviser who, after checking the LV= Business Risk calculator recommends that they take insurance to cover the loan. They take out Key Person Cover for £150,000 with LV= (which equals the original amount of money lent by the bank) on a ‘life of another basis’ with MN Engineering Limited as the policy owner. LV= would pay the cover if Nicole dies, or is diagnosed with a critical illness shown in the policy conditions.

In this example, Mark and Sam felt they didn't need to protect future profits. To find out more read our case study for small business profits below.

Steven

Steven

Windsor Agricultural

The owners want financial protection if Steven, who is vital to the business, were to suddenly die or be diagnosed with a serious illness.

Tom

Tom

green arrow pointing down
Green tick in a circle

Scenario 1

The company takes out Key Person Cover on Steven's life to protect profit: £500,000.

green arrow pointing down
  1. Steven has a stroke and takes early retirement.
  2. The £500,000 benefit covers the sudden loss of profits, and pays for a number of new sales people.
  3. Windsor Agricultural Supplies Ltd continues trading and making a profit.
Red arrow pointing down
Red cross in a circle

Scenario 2

The company doesn't take out Key Person Cover.

Red arrow pointing down
  1. Steven has a stroke and takes early retirement.
  2. The company doesn't have the budget available to cover the sudden loss of profits, or hire new sales people.
  3. The company has two options:

  4. Take out a business loan and risk default.
  5. The business doesn't recruit replacement staff, putting the business at real risk of closure.

  • The business is expanding into new offices.
  • Single key person integral to maintaining customer relationships.
  • Risk to cover is two times net profit worth £500,000.

Windsor Agricultural Supplies Ltd is a well-established distributor of farming supplies based in Berkshire. After trading for twelve years the company now employs a team of six and has been able to purchase their trading premises outright. Over the coming year’s owners Steven Jones and Tom Collins plan to open additional premises in Pembrokeshire and Yorkshire, and are already in the process of finding sites to trade from.

Steve has an agricultural background and the knowledge to credibly deal with influential customers and suppliers, he also writes articles for a number of relevant publications. Tom is focused on the day-to-day logistics of the business, ensuring bills and salaries are paid on time, and stock is where it should be.

During a meeting and risk review with their financial adviser, using our Business Risk calculator and Key Person calculator it becomes clear that while Tom is clearly important to the running of the business, without Steven, they would struggle to maintain some of their important customer and supplier relationships, and the company’s profile and reputation would undoubtedly slip if they stopped appearing in the industry press. Tom was also concerned that without Steven he would find it very hard to continue with the planned expansion of the business, and the reduced level of trading would force him to lay off staff. In short, the two shareholders felt that while they were both important to the business, Steven would be vital over the coming years and without him the business would struggle to fulfil its potential – they realised he was a key person.

The company take out key person cover on Steven for £500,000, paying out on his death or diagnosis of a critical illness. The level of cover was based on 2 x net profit (apportioned for the % Steven is considered to be directly responsible for).

Unfortunately, 18 months later Steven suffers a major stroke with severe permanent disabilities. He’s unable to return to work for the foreseeable future. After an initial period of instability Tom was able to stabilise the business, return profits to the level they were at before and complete the expansion of the business. This was made possible because of the £500,000 claim paid to protect the company’s profit. The money enabled Tom to meet his short term obligations (wages, costs of stock etc.) and also deal with the loss of a number of key customers to competitors. He’s also able to hire a number of well-respected sales people who shared some of Steven’s skills and knowledge and are able to begin the job re-building a strong client base. He was also able to engage a PR firm to maintain the company’s presence in the industry press now that Steve was no longer available as a commentator.

Two years after Steven’s stroke, Tom was able to complete their expansion plans and Agricultural Supplies Ltd now employs 18 people across three locations. More importantly, he was able to deal with the loss of a key individual without having to compromise the integrity of the business and take any painful cost-cutting measures such as making staff redundant or even having to wind the business up.

Great reasons to choose LV= for Key Person Cover

Strong claims performance

Making sure your client has a successful claim is as important to your client as it is to you. Your clients get vital financial help when they need it most and you feel confident in the provider you recommended.

We’re proud of our performance with 95%* of Life Insurance claims and 89%* of critical illness claims paid in 2018 and an average annual payment across all new Life Insurance Claims of £56,659 and £78,334 across new Critical Illness claims.

*These figures include claims paid for both our Life Insurance and Lifetime+ products. Our Lifetime+ product is no longer available.

Better underwriting

We know advisers are not usually medical experts so we help out as much as we can. This means you can concentrate on providing the best financial advice for your client.

  • We have no standard exclusions on our income protection plans making it straightforward to explain to your client.
  • Our online application system is powered by a strong, intelligent underwriting rules engine which means that you're more likely to get an instant decision.
  • We have flexible medical examination arrangements. If your client needs a medical examination, we could send a nurse to visit them at home or work or use a medical examiner at a convenient location.
  • We pay for medical underwriting (except medical certificates such as sick notes).
  • We have a dedicated underwriting hotline to help you iron out any potential issues your client may have.
Value add services

LV= Doctors services

LV= Doctor Services gives your clients access to six medical services via one simple app or phone call:

  • Remote GP
  • Prescription Services
  • Second Opinion
  • Remote Physiotherapy
  • Remote Psychological Services
  • Discount health MOTs

Member benefits

Every client who is covered by one of our personal or business protection and retirement products automatically becomes a member of LV=. This means they are entitled to a range of added benefits and support. These include free and unlimited access to our 24/7 confidential member helpline and discounts on a number of LV= insurance products.

Our LV= member helpline gives you 24/7 access to health advice, counselling services and expert legal advice.


LV= Business Care

LV= Business Care is designed for small business owners and is available as soon as your client takes out LV= Business Protection cover. Our service gives your clients free access to legal and tax experts available at the end of the phone, when they need them.

Our service offers advice in two key areas, Legal and Tax;

Business legal advice

Direct access to legal experts specialising in business and commercial law; covering areas such as;

  • Employment law and tribunal claims
  • Health & Safety law and requirements
  • Disputes including tenancy and debt recovery
  • Commercial and contractual disputes

Advice is available 24 hours a day, 7 days a week

Business tax and VAT advice

Direct access to business tax and VAT experts made up of accountants and ex HMRC employees, covering areas such;

  • Tax and VAT relief
  • Completing a self-assessment return
  • Current and changes to tax rules
  • Dividends paid from limited companies
  • Receiving a tax investigation notice

Advice is available Monday-Friday 9am-5pm

When setting up key person cover we recommend that you use our Business Risk calculator to bring to life the likelihood of health issues affecting key people within the business and the subsequent financial impact. Our Key Person Cover calculator will help you in recommending the correct amount of cover for each key person.

Suitability wording

We’ve produced a range of template paragraphs that are designed to describe generic features of each type of policy, as well as the specific benefits of our own products. You can use and adapt these paragraphs to help construct your own Suitability Letters.

Use the drop down menu to select the relevant section, then copy and paste it into your suitability letter.

 

A good suitability letter is:

  • your opportunity to justify and reinforce the reasons for your advice and recommendations
  • an excellent opportunity to document unmet and future needs and the importance of ongoing review discussions
  • your record of the discussions held and the recommendations made/not made and why

It should be clear, fair and not misleading. It should be personal, explain the reasons why a recommendation has been made and how it meets the customers needs and objectives. It should highlight any risks involved.

LV= has taken care to ensure the accuracy of the information at the time of issue but does not accept liability resulting from your use of it.

Calculators

Choice calculators to support your discussions

Losing a key person at any time can really disrupt a business, but even more so when it's unplanned, or happens suddenly. This calculator uses a key person's contribution to the business profits to help you work out the right amount of cover.

This calculator helps your clients understand the likely risks of health issues affecting the key people within the business (individually and as a group), as well as the financial impact each person could have on the business.

How we use personal information. Find out how we use your personal information, and what rights you have by visiting How we use your personal information. This includes who we are, how long we hold information, what we do with it and who we share it with.

Read below a summary of the relevant product information about Business Protection Life Insurance, in accordance with the Insurance Distribution Directive. Designed to help you make an informed decision and comparison for your client, we set out the product’s target market, distribution strategy, suitability, main features, risks, options and costs.

This information is also available in downloadable pdf format.

Waiver of Premium can be added as a separate policy. Read about our Waiver of Premium product profile.

This is only a summary of the product features. For more information please read the Key Features document and the Policy Conditions.

Business protection is aimed at small and medium-sized businesses (SMEs) to help safeguard their financial future by providing a one-off cash payment in the event that the business owner or key person dies or is diagnosed with a terminal illness.

Business protection targets three key elements - ownership, profit and debt. It’s important to understand the setup of the client’s business, who the owners are and the risks they face to help identify and justify the need for business protection and the basis for the policy. The different types of business protection are Key Person Cover, Share and Partnership Protection.

A key person could be the business owner, director, sales person or any employee with specialist skills or expertise. Losing a key person can be disastrous for the long-term survival of a business and the proceeds from a policy can give the business a cash injection, either used to protect profits or clear debt to help trading continue.

The client can choose whether the policy is written on an own life or life of another basis, with the exception of Limited Liability Partnerships or Limited Companies. For these types of business structures, the policy should be set up on a life of another basis, with the company taking out a policy and insuring their shareholder/partner or key person.

Key Person Cover would not be used to protect ownership of the business and if a business wants to protect profit and debt, two separate policies would need to be set up to cover each element.

The setup of the policy depends on who is being insured, and the business type as explained below:

Business Type

Policy written on life of Employee

Policy written on life of business owner

Own life or Life of another

In Trust Y/N

Own life or Life of another

In Trust Y/N

Sole Trader

Life of another

No – sole trader is policy owner

Own Life

Yes – for family of business owner

Partnership

Life of another

Yes – in trust for partners

Own Life

Yes – in trust for partners

Limited Company, or Limited Liability Partnership (LLP)

Life of another

No – Limited Company or LLP is the policy owner

Life of another

No - Limited Company or LLP is the policy owner

The policy provides the owners of a business with a lump sum to buy the affected individual’s share of the business in the event of them dying or being diagnosed with a terminal illness, helping the surviving owners retain full control and ensure the deceased family’s estate receives fair settlement. The business owners can choose whether the policy is written on an own life or life of another basis however life of another is usually only suitable where there are just two owners, and doesn’t provide any flexibility for future business changes.

Regardless of whether the policy is written on an own life or life of another basis a suitable double or cross option arrangement needs to be in place which facilitates the sale of the deceased’s share to the surviving owners.

To ensure your clients receive the right level of protection and to help ensure the policy is set up to meet the business’s needs, we believe this product should be sold on an advised basis, face to face or over the phone.

It’s important to regularly review your client's circumstances and protection needs to make sure their cover is appropriate.

  • Pays a cash lump sum on death, or diagnosis of a terminal illness, during the term
  • Level, increasing or decreasing cover
  • Guaranteed premiums only
  • We won't pay a claim if the person insured dies as a result of intentionally taking their own life in the first 12 months of the policy
  • This policy is not suitable for clients who want to protect their income should they be unable to work due to accident and sickness
  • There is no cash in value at any time
  • If your client stops paying their premiums, their cover may cease
  • If your client chooses level cover, it won't keep up with inflation and could buy less in the future
  • The minimum term is 5 years and maximum term 45 years. The policy must end before any person insured reaches the age of 85 (for level and decreasing cover) or age 70 (for inflation-linked cover).
  • Clients can choose to take out a policy on an own life (written into trust) or life of another basis for either someone crucial to the firm’s profits, or one or more business owners. If your client is insuring someone else, they must meet these requirements.
  • For policies written under trust, it will depend on the structure of the business as to how the trust is set up.

To apply, the client must be:

  • Permanently living in the UK
  • Aged between 17 and 79 (for level and decreasing cover)
  • Aged between 17 and 59 (for inflation-linked cover)
  • Those looking for personal protection
  • Those wanting to provide a death in service benefits for employees
  • Those looking to cover a regular benefit if the person insured is unable to work for a period of time due to accident or sickness

Guaranteed Increase Options: Your client can increase the amount of the cover for their employee, if certain events happen and they are eligible. If your client changes the amount of their cover using one of these options, their premium will also change to reflect this. The premium will be based on the age and smoker status of the employee at the time of change. For more details, refer to the Policy Terms and Conditions.

Member benefits: With this policy the insured person automatically becomes a member and is entitled to a range of benefits, at no added cost. These include voting rights, free advice helplines and discounts on selected LV= products. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= membership and member benefits are available at LV.com/members.

LV= Business Care: For all new policies (from 1 October 2015), we offer the policyholder (the business) telephone access to free specialist advice in business and commercial law, business tax and VAT. Provided at no added cost, these services are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= Business Care are available at LV.com.

LV= Doctor Services: For all new policies (from 1 September 2018), the person insured under the policy has access to a number of medical services and advice which can be accessed via one simple app or phone call, at no added cost. These include Remote GP, Second Opinion, Prescription Services, Remote Physiotherapy, Remote Psychological Services and discounted health MOTs. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. For more details visit LV.com.

The policy premium also includes a fee, which is a fixed monthly amount, to cover administration and support costs.

LV= Doctor Services, LV= Business Care and Rehab Support Services are provided by third party companies. These services are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

Read below a summary of the relevant product information about Business Protection Combined Life and Critical Illness Cover, in accordance with the Insurance Distribution Directive. Designed to help you make an informed decision and comparison for your client, we set out the product’s target market, distribution strategy, suitability, main features, risks, options and costs.

This information is also available in downloadable pdf format.

Waiver of Premium can be added as a separate policy. Read about our Waiver of Premium product profile.

This is only a summary of the product features. For more information please read the Key Features document and the Policy Conditions.

Business Protection Combined Life and Critical Illness Cover is aimed at small and medium-sized businesses (SMEs) to help safeguard their financial future by providing a one-off cash payment in the event that the business owner or key person dies or is diagnosed with a critical illness.

Business protection targets three key elements - ownership, profit and debt. It’s important to understand the setup of the client’s business, who the owners are and the risks they face to help identify and justify the need for business protection and the basis for the policy. The different types of business protection are Key Person Cover, Share and Partnership Protection

A key person could be the business owner, director, sales person or any employee with specialist skills or expertise. Losing a key person can be disastrous for the long-term survival of a business and the proceeds from a policy can give the business a cash injection, either used to protect profits or clear debt to help trading continue.

The client can choose whether the policy is written on an own life or life of another basis, with the exception for Limited Liability Partnerships or Limited Companies. For these types of business structures, they should be set up on a life of another basis, with the company taking out a policy and insuring their shareholder/partner or key person.

Key Person Cover would not be used to protect ownership of the business and if a business wants to protect profit and debt, two separate policies would need to be set up to cover each element.

The setup of the policy depends on who is being insured, and the business type as explained below:

Business Type

Policy written of life of Employee

Policy written on life of business owner

Own life or Life of another

In Trust Y/N

Own life or Life of another

In Trust Y/N

Sole Trader

Life of another

No – sole trader is policy owner

Own Life

Yes – for family of business owner

Partnership

Life of another

Yes – in trust for partners

Own Life

Yes – in trust for partners

Limited Company, or Limited Liability Partnership (LLP)

Life of another

No – Limited Company or LLP is the policy owner

Life of another

No - Limited Company or LLP is the policy owner

The policy provides the owners of a business with a lump sum to buy the affected individual’s share of the business in the event of them dying or being diagnosed with a critical illness, helping the surviving owners retain full control and ensure the deceased family’s estate receives fair settlement. The business owners can choose whether the policy is written on an own life or life of another basis however life of another is usually only suitable where there are just two owners, and doesn’t provide any flexibility for future business changes.

Regardless of whether the policy is written on an own life or life of another basis a suitable double or cross option arrangement needs to be in place which facilitates the sale of the deceased’s share to the surviving owners. As critical illness cover is included a suitable single option agreement should also be in place to allow a shareholder to sell their share to their fellow shareholders if they’re diagnosed with a critical illness.

To ensure your clients receive the right level of protection and to help ensure the policy is set up to meet the business’s needs, we believe this product should be sold on an advised basis, face to face or over the phone.

It’s important to regularly review your client’s circumstances and protection needs to make sure their cover is appropriate.

  • Pays a cash lump sum on death, or diagnosis of a specified critical illness, during the term
  • Covers 64 conditions including 44 full payment, and 20 additional payment conditions
  • Enhanced claim benefits for 16 full payment conditions
  • Children’s critical illness cover automatically included (for 62 of the 64 conditions), at no added cost
  • Level, increasing or decreasing cover
  • Guaranteed or reviewable premiums
  • Option to include Total Permanent Disability as a critical illness
  • Your client is only covered for the conditions and definitions listed in the policy conditions and no others
  • This product also provides cover for less severe conditions, these are called additional payments. If a claim is paid for an additional payment, the client’s full amount of cover remains in place. We’ll only pay one claim for each additional payment condition covered under the policy.
  • When a claim is paid for a full payment condition or if your client were to die, the policy would normally end (unless the customer has excess life cover over and above the amount of critical illness cover)
  • We won't pay a claim if your client dies as a result of intentionally taking their own life in the first 12 months of the policy
  • This policy is not suitable for clients who want to protect their income should they be unable to work due to accident and sickness
  • There is no cash in value at any time
  • To make a claim, the person insured must survive for at least 14 days after being diagnosed (this doesn't apply to claims for children's cover)
  • If your client stops paying their premiums, their cover may cease
  • Reviewable premiums may increase or decrease during the term of the policy. However, the premium is guaranteed not to change for at least the first 5 years of the policy.
  • If your clients choose level cover, it won't keep up with inflation and could buy less in the future
  • The minimum term is 5 years and maximum term 40 years. The policy must end before the any person insured reaches the age of 70.
  • Clients can choose to take out a policy on an own life (written into trust) or life of another basis for either someone crucial to the firm’s profits, or one or more business owners. If your client is insuring someone else, they must meet these requirements.

To apply, the client must be:

  • Permanently living in the UK
  • Aged between 17 and 64 (for level and decreasing cover)
  • Aged between 17 and 59 (for inflation-linked cover)
  • Those looking for personal protection
  • Those wanting to provide a death in service benefits for employees
  • Those looking to cover a regular benefit if the person insured is unable to work for a period of time due to accident or sickness

Children’s Critical Illness Cover: is automatically included at no added cost for your client’s children for all of the listed critical illnesses (with the exception of Total Permanent Disability and Diabetes mellitus Type 1) from birth until age 21. Children’s cover only pays out on diagnosis of a critical illness; there is no survival period required for children and will not pay out if the child dies.

Additional Payments: This product also provides cover for 20 less severe conditions. These are included at no added cost, and conditions and limits apply. If a claim is paid for an additional payment, your client's full amount of cover remains in place. For more details, refer to the Policy Terms and Conditions.

Enhanced Payments: We will pay an enhanced claim amount on diagnosis of six specified neurological conditions, if your client is under 45 years old, and on ten full payment conditions if the claim is as a direct result of an accident. These are included at no added cost, and conditions and limits apply. For more details, refer to the Policy Terms and Conditions.

Total Permanent Disability: can be included, at an additional cost at outset as a critical illness condition. There are two types of cover; own occupation or work tasks, and the type we offer will depend on your client's occupation. Own occupation will cover your client if as a result of sickness or accident they are left unable to do the main aspects of their normal occupation and are never expected to be able to do so again. Work tasks will cover your client if as a result of sickness or accident they are left unable to carry out 3 of 6 specified work related tasks and are never expected to be able to do so again. For more details, refer to the Policy Terms and Conditions.

Guaranteed Increase Options: Your client can increase the amount of the cover for their employee, if certain events happen and they are eligible. If your client changes the amount of their cover using one of these options, their premium will also change to reflect this. The premium will be based on the age and smoker status of the employee at the time of change. For more details, refer to the Policy Terms and Conditions.

Member benefits: With this policy the insured person automatically becomes a member and is entitled to a range of benefits, at no added cost. These include voting rights, free advice helplines and discounts on selected LV= products. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= membership and member benefits are available at LV.com/members.

LV= Business Care: For all new policies (from 1 October 2015), we offer the policyholder (the business) telephone access to free specialist advice in business and commercial law, business tax and VAT. Provided at no added cost, these services are non-contractual and can be changed or removed at any time, and conditions apply. More details about LV= Business Care are available at LV.com.

LV= Doctor Services: For all new policies (from 1 September 2018), the person insured under the policy has access to a number of medical services and advice which can be accessed via one simple app or phone call, at no added cost. These include Remote GP, Second Opinion, Prescription Services, Remote Physiotherapy, Remote Psychological Services and discounted health MOTs. These benefits are non-contractual and can be changed or removed at any time, and conditions apply. For more details visit LV.com.

The policy premium also includes a fee, which is a fixed monthly amount, to cover administration and support costs.

LV= Doctor Services, LV= Business Care and Rehab Support Services are provided by third party companies. These services are not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

Read below a summary of the relevant product information about LV= FPP Waiver of Premium, in accordance with the Insurance Distribution Directive. Designed to help you make an informed decision and comparison for your client, we set out the product’s target market, distribution strategy, suitability, main features, risks, options and costs.

The waiver of premium product profile is also available in downloadable pdf format.

This is only a summary of the product features. For more information please read the Policy Summary and Policy Conditions.

Waiver of Premium forms part of the Flexible Protection Plan and is designed to pay the premiums for all policies (with the exception of Relevant Life Cover) under their plan, if the person insured is unable to work due to accident or sickness for longer than the waiting period.

The waiting period for this product is set at six months, unless it includes Income Protection or Personal Sick Pay, where the waiting period will match the one chosen for that product.

Flexible Protection Plan is suitable for a client who suffers a financial loss in the event of ill health, accident or sickness or has financial dependents who would suffer financially in the event of their death. The target market varies for each of the products within the Flexible Protection Plan, so it is recommended to refer to the specific products for further information.

This product cannot be set up as a standalone policy.

To ensure your client receives the right level of protection, we believe this product should be sold on an advised basis, face to face or over the phone.

It’s important to regularly review your client’s circumstances and protection needs to make sure their cover is appropriate.

  • Pays FPP plan premiums on policyholder’s behalf if they’re unable to work due to sickness or accident
  • Based on own ‘occupation cover’, or ‘homemaker cover’ definition
  • Once the person insured reaches 70, regardless of how they were being measured, the basis changes to work tasks measures. This means they are totally unable to carry out 3 or more tasks from a list of everyday activities.
  • Standard waiting period of 6 months. Except where Waiver of Premium is attached to an LV= FPP Income Protection or Personal Sick Pay policy. In which case, the Waiver of Premium policy will adopt the waiting period the client has chosen for IP/PSP.
  • The product does not pay out an actual cash amount, instead the client’s FPP premiums are waived
  • There is no cash in value at any time
  • If your client stops paying their premiums, their cover may cease
  • The minimum term is 5 years. It will end once all of the policies included in the Flexible Protection Plan have ended, or if earlier once the person insured reaches age 85.
  • Clients can choose to take out a policy on a single or joint life basis
  • On a joint life basis, the policy will only waive the premiums for the FPP plan once, if either of the people insured are unable to work.
  • If your client is insuring someone else an insurable interest must exist at the start of the policy. A spouse or civil partner is automatically assumed to have an insurable interest.
  • The cover will be the total premium your client pays for all of the policies included in the Flexible Protection Plan
  • The cover will automatically go up if any of the policies with inflation-linked cover are included in the plan
  • If any new policies are taken out or existing policies are altered, we will normally extend Waiver of Premium to cover the new plan premium

To apply clients must be:

  • Permanently living in the UK
  • Aged between 17 and 59
  • If they are insuring someone else, they must meet these requirements. If they are insuring two people both must meet these requirements.

Is suitable for:

  • Those who are looking to cover their premiums in the event they are unable to work due to an accident or sickness
  • Those who have existing or are looking to take out policies within the Flexible Protection Plan
  • Those who meet the eligibility requirements for Waiver of Premium

Is not suitable for:

  • Those who do not have any LV= Flexible Protection Plan policies in place
  • Those who want to cover their premiums on Relevant Life Cover in the event of an accident or sickness
  • Those who are unemployed
  • Those looking to replace their monthly income in the event of accident or sickness

There are no options or additional benefits.

The policy premium also includes a fee, which is a fixed monthly amount, to cover administration and support costs.

Underwriting support

Pre-underwriting helpline

Go straight through to our underwriters who can quickly answer questions like exclusions or loading.

Email: [email protected]
Call: 0800 678 1893
8:30am to 6:30pm Monday to Friday
TextDirect: first dial 18001

Tele-interview service

Our underwriters may need more information about a particular disclosure.

Our team of friendly, fully trained UK based tele-interviewers, will call your client to gather details of their health and medical history so we can assess their application. This usually takes between 20-30 mins.

You can read our Tele-interview guide to help prepare for ain interview.

Tele-interview booking service

You or your client can book a tele-interview appointment with us directly online within 30 mins, without having to contact our new business team.

  1. It's usable as soon as you have the policy number.
  2. It shows all of the appointments available.
  3. You can book appointments as early as an hour after submission or up to seven days in advance.
Pre-underwriting tool

What is it?

Our Pre-Underwriting Tool, part of Fastway, allows you to enter illnesses and conditions (disclosures) giving instant, indicative underwriting decisions at any time.

Where to find the tool

  1. Log into Fastway
  2. Choose "New Pre-UW Enquiry" at the top of the page
  3. Refer back to the decision by accessing the record’s unique ID in your Fastway dashboard
Underwriting and financial limits

Life Insurance underwriting limits

Age next birthday

PSR*

Cotinine**

GPR

ME

HIV

BIOCHEM

PROF

HbA1c

EXECG

To age 35

£750,001

£900,001

>£1m

>£2m

>£1.5m

>£2m

N/A

N/A

>£7.5m

36-40

£600,001

£900,001

>£1m

>£2m

>£1.5m

>£2m

N/A

N/A

>£7.5m

41-45

£500,001

£800,001

£750,001

>£2m

>£1.5m

>£2m

N/A

N/A

>£5m

46-50

£400,001

£700,001

£600,001

>£1m

>£1.5m

>£1m

N/A

N/A

>£4m

51-55

£250,001

£550,001

£400,001

>£1m

>£1.5m

N/A

>£1m

>£1m

>£3m

56-60

£200,001

£450,001

£300,001

£750,001

>£1.5m

N/A

>£1m ***

>£1m

>£2m

61-65

£100,001

£250,001

£150,001

£500,001

N/A

N/A

>£1m ***

>£1m

>£1.5m

Over 65

£75,001

£150,001

£100,001

£250,001

N/A

N/A

>£1m ***

>£1m

>£1m

* PSR not required if ME required. ** Cotinine required on non smokers only. *** PSA included

Make a claim

Making a claim on behalf of your client

You can contact us in the following ways to notify us that your client wishes to make a claim;

  1. phone: 0800 756 5869
  2. email: [email protected]
  3. post: LV= Health Claims Team, Emperor House, Grenadier Road, Exeter Business Park, Exeter, EX1 3LH

The information we need

For most claims, we’ll send your client a claim form. This should be completed, and include the name and contact details of your client's GP or medical specialist, as well as any supporting medical or financial evidence requested in the claim form. We may also ask for:

  • Basic details of the reason your client is unable to work.
  • Financial evidence as detailed in the claim form.

Paying the claim

  1. We’ll keep your client (and you) informed throughout the claim.
  2. We'll contact your clients GP or medical specialist directly to follow up on any outstanding requests for medical evidence.
  3. We’ll let your client know if there’s anything they can do to speed up their claim payment.
  4. We’ll normally pay the claim within 48 hours of receiving all the required evidence and making a final decision.
  5. We offer your client free access to a medical second opinion from one of the UK’s biggest networks of medical professionals through LV=’s partner Square Health.
Claims performance

95%* of all new Life Insurance claims were paid in 2018

Here at LV=, we offer a clear and fair approach to paying claims, as we believe anyone can be affected by long-term illness – regardless of age or lifestyle. Take a look at our full 2018 claims performance.

Protection summary 2018

Life*

Critical Illness

Total value of claims paid

£32.6m

£24.8m

Average annual benefit/payment

£56,659

£78,334

Highest annual benefit/payment

£675,000

£502,079

Policy in force duration

9 yrs 2 mths

6 yrs 8 mths

Ave. age customer at claim

Life*

Critical Illness

Male icon

Male

63

50

Female icon

Female

63

47

An icon of a man and lady

Youngest customer

24

25

*These figures include claims paid for both our Life Insurance and Lifetime+ products. Our Lifetime+ product is no longer available.

Telephone icon

Contact us about Key Person Cover

Quotes and questions: 0800 678 1890

FOR UK FINANCIAL ADVISERS ONLY
LV=, County Gates, Bournemouth, BH1 2NF, UK