Recently added to Liberty Life’s Lifestyle Protector Life Cover benefit, the income option gives the policyholder more flexibility in determining how a claim will be paid out to their beneficiaries.
For each beneficiary, the policyholder will now be able to choose which proportion of their allocated sum assured will:
- be paid out as a lump sum.
- be used to purchase an income.
The income will be facilitated through the purchase of a suitable Liberty investment product (e.g. a Guaranteed Income Annuity).
The Death Income feature aims to meet a need in the market, addressing cases where the policyholder wants to look after their family after they pass away and where:
- A lump sum payment may be misappropriated and
- A lump sum payment may be perceived as inappropriate (where beneficiaries should not be seen to be enriched or profiting from the death).
- The policyholder wants to ensure that the benefit payment is a closer match to the needs of the beneficiary (replacement of the loss of the policyholder’s monthly salary or maintenance).
The monthly income begins shortly after the claim, as soon as all necessary documents are submitted. This ensures that money is available to reduce the financial impact of the death while the claim is being assessed.
The beneficiary nomination can be changed at any time via a servicing request including:
- Who the beneficiaries are and their allocated sum assured.
- Choice of percentage lump sum converted into an income (0 to 100%).
- Choice of income payment term (five to 20 years).
- The income is not guaranteed. The income amount will be known when the Liberty investment product is purchased.
- Commission may be payable on the investment product.
- Life Cover premiums and underwriting requirements remain unchanged.
- Tax on the Liberty investment product will be based on tax regulations at the time.
The Death Income feature, added to your Life Cover, will be available from: 26 May 2018 on new policies and 23 June 2018 on existing policies.
Until next time, take care.