Flexible Life Plan

You can use your Flexible Life Plan to help provide financial security for your loved ones, cover an inheritance tax liability or for business protection.

The plan will make a one-off payment when you die if you have a single life policy. With a joint life plan, we’ll make a one-off payment when the first or second life assured dies, depending on how you set up your policy. If you chose the second life, we’ll pay the sum assured on the second death.

If you place your plan in a suitable trust, the one-off payment will go to the intended beneficiary.

If you’re an existing customer, you would have structured your Flexible Life Plan in one of four ways to suit your needs. We’ve outlined them below.

Based on which option you selected, we’ve invested your premiums in the fund you’ve chosen. We also deduct the cost of the life cover from this.

Your Flexible Life Plan premiums remain fixed for the first ten years. After this period, we review the cost of your life cover every five years, with your premium very likely to increase.

If you chose 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

If you selected this option, you chose your level of cover and premium amount.

Guaranteed Insurability (increase) Options

If we accepted your application on standard terms with no medical rating, you can 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 

Depending on how you set up your plan, 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 accepted 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.

If your policy is held in trust, 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. If you don’t have a financial adviser, or need to appoint a replacement adviser, please visit our find an adviser page for more information.