Scottish Widows relevant life insurance

Scottish Widows is one of the UK’s longest-established protection insurers and offers relevant life insurance as part of its business protection range.

Its Relevant Life Cover enables employers to provide tax-efficient life cover for an employee or company director, with the policy typically written into an appropriate relevant life trust.

Scottish Widows is regularly included by independent financial advisers when comparing relevant life insurance providers, particularly for limited company directors who want straightforward life cover backed by an established insurer.

What does Scottish Widows offer?

Scottish Widows’ Relevant Life Cover is designed to pay a lump sum if the insured employee dies during the policy term or is diagnosed with a terminal illness that meets the policy definition.

Depending on the policy selected, features include:

• Life cover with terminal illness benefit included at no extra cost
• A choice of level or increasing (RPI-linked) cover
• Guaranteed premiums throughout the policy term
• Accidental Death Cover while an application is being considered, subject to eligibility
• The ability to insure up to 25 individual employees under one plan
• Access to Scottish Widows Care, provided in partnership with RedArc

Eligibility and the terms offered will depend on the individual application.

Scottish Widows Care

One feature included with eligible policies is Scottish Widows Care.

Delivered in partnership with RedArc, the service provides practical guidance and emotional support to policyholders and their families from the start of the policy, rather than only when a claim is made.

The service is separate from the insurance benefit itself and is designed to provide additional support if serious health or life events arise during the policy term.

For some directors, the additional support will be a useful extra. Others will simply be looking for the right level of cover at a competitive price.

Applying for cover

Every application is individually underwritten.

When assessing an application, Scottish Widows will typically consider factors including:

• age
• smoking status
• medical history
• occupation
• salary and remuneration
• the amount of cover required
• the chosen policy term

Free Accidental Death Cover may be available while an application is being assessed, subject to the policy terms.

Scottish Widows also offers guaranteed increase options in certain circumstances, allowing cover to be increased after specified life events without further medical evidence.

Relevant life trust

As with other relevant life policies, Scottish Widows expects the policy to be written into an appropriate Relevant Life Policy Trust.

The trust is designed specifically for relevant life arrangements and helps ensure any claim is paid to the trustees for the benefit of the intended beneficiaries.

Scottish Widows recommends establishing the trust when the policy starts. A discretionary trust structure is normally used, with the policyholder able to provide a Letter of Wishes to guide the trustees.

Who might consider Scottish Widows?

Scottish Widows is one of several established insurers offering relevant life insurance.

Some directors will be looking for guaranteed premiums, while others may be interested in the additional support available through Scottish Widows Care.

As with any provider, the right choice will depend on your circumstances, including the amount of cover you need, your remuneration and the outcome of the underwriting process.

Things worth comparing

Before you choose a provider, it is sensible to compare more than simply the monthly premium.

Other points worth considering include:

• the amount of cover available
• how remuneration is assessed
• underwriting requirements
• guaranteed or reviewable premiums
• trust arrangements
• additional policy features and support services

Different insurers may assess the same application differently, so Scottish Widows won’t always offer the lowest premium.

Comparing quotes from several providers is usually the easiest way to see what’s available.

Compare relevant life insurance quotes

It’s worth comparing quotes from more than one insurer before making a decision.

Our independent financial adviser partner, Broadbench Ltd (FCA No. 590288), can compare policies from a range of leading insurers and recommend suitable cover based on your circumstances.

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