Flexible Life Plan

Have you thought about how your family would pay their inheritance tax liability when you’re gone? Or if you are a shareholder in a business, how would your business partners ensure longevity of the business by purchasing your shares?

Our Flexible Life Plan will make a one-off payment when you die if you have a single life policy. With a joint life plan, we can either make a one-off payment when the first or second life assured dies. If you choose the second life, we’ll pay the sum assured on the second death.

You can use this plan to help provide financial security for your loved ones, cover an inheritance tax liability or for business protection. By placing our plan in a suitable trust you can make sure that the one-off payment goes to the intended beneficiary.

This plan could be right for you if:

• You want to cover your own life or lives, either on a single life or joint life basis
• At least one owner and life assured is over the age of 18 and less than 74
• You’re looking for life assurance cover that can last until you die rather than over a fixed-term
• You’re looking for life assurance cover that can be placed in a trust to avoid unnecessary delays in payment
• You’re looking for life assurance cover of at least £25,000 subject to a minimum premium of £25 a month
• You’re looking for a plan that can safeguard yearly rises in inflation by increasing your life cover and premiums accordingly
• You’re looking for a plan that you can alter if your circumstances change

This plan isn’t right for you if:

• You’re unable to continue the premiums throughout your life and at subsequent reviews where the premium is likely to increase depending upon the performance of your underlying investments
• You’re unable to receive advice and complete the paperwork in the UK, Channel Islands or Isle of Man. 
• You’re looking for cover where the cost doesn't increase with age
• The cover is only required for a fixed period of time
• You want a policy that can provide a surrender value

You can structure your Flexible Life Plan in four ways to suit your needs. We’ve outlined them below.

When you’ve selected the option that works for you, we’ll invest your premiums in the fund you’ve chosen. We’ll also deduct the cost of the life cover from this.

Your premium will remain fixed for the first ten years. After this period, we will review the cost of your life cover every five years with your premium very likely to increase. If you choose the maximum basis option, your premium is likely to increase significantly at each review. You can either pay the increased premium or use the value built up in the fund to pay for the increase. This increase could be because the assumed growth rate is not achieved, or the cost of providing life assurance increases.

Here are our four cover options:

Standard

This aims to provide a level of cover throughout your life. It uses an assumed growth rate which takes your age, health and other circumstances into account.

Maximum

This option has a significantly lower initial premium compared to the standard cover option. However, as less money is invested from your premiums, your premium will increase substantially at each policy review-starting at year ten and then every five years thereafter.

Target

The premium and assumed growth rate are designed to provide the required level of cover for a specified number of years. Your premium will increase significantly after this time, should you wish to continue the policy.

Premium and Benefit Specified

This allows you to choose your level of cover and your premium amount.

Guaranteed Insurability (increase) Options

If we accept your application on standard terms with no medical rating, you could increase your level of cover without further medical underwriting, if: 

• You get married or enter a civil partnership
• You have or legally adopt a child 
• Your mortgage increases 
• Your inheritance tax liability changes 

Premium benefit Waiver 

For an extra cost, we’ll waive all or part of your premiums due if for any reason you’re unable to work for a period of six months. You won’t have to pay anything until you return to work. This benefit is only valid if you’re unable to work before the age of 65.

Inflation option

If we accept your application with no medical rating, our inflation option lets you increase your level of cover each year. Your cover can increase by the lower of 10% or the rate of inflation in the Isle of Man. Your premium will change to reflect your new cover level.

The Flexible Life Plan can be written under a discretionary or a bare gift trust. We provide draft deeds for both trusts.

If your policy is placed in trust then any payment will go to the trustees or directly to a beneficiary rather than to your estate. This could help reduce any potential inheritance tax liability.

We recommend you speak to a financial adviser before placing your policy into a trust.