For advisers only. Not for use with customers.
FRIENDS® Protection
Income Protection
Career Break Option
What is the ‘Career Break Option’?
FRIENDS® Protection
• The ‘Career Break Option’ is automatically built into Friends
Provident’s Income Protection Plan.
• The option is designed to allow policyholders to take a break from
work – for example to bring up children or take up further
education.
• During the career break, the policyholder is issued with a
Houseperson’s Cover policy with a revised sum assured and
premium.
What is the ‘Career Break Option’?
FRIENDS® Protection
• The original Income Protection policy is suspended for up to 5
years during the Career Break, but can be resumed without any
further underwriting and on their original terms and conditions,
including any increases in benefits and premiums that would have
taken place while the policy was suspended.
• The policyholder can choose what sum assured and deferred
period they require for the new Houseperson’s policy (subject to a
maximum sum assured of £300 per week).
Limitations
FRIENDS® Protection
• The maximum sum assured for a new Houseperson's policy is the lower of:
– £300 per week.
– The total of sum assured under the suspended policy
• Increasable Insurance Option and Increasing Cover are not available under the
Houseperson's benefit and therefore do not form part of a Houseperson's policy
taken out using the Career Break option.
• If the Career Break exceeds 5 years, a new Income Protection policy would
need to be taken out and would be subject to terms at that time and full
underwriting. Alternatively, the replacement Housperson’s policy can be
continued.
Incapacity Assessment Criteria for Houseperson’s Cover
FRIENDS® Protection
As OWN Occupation would not
apply to a Houseperson, in
order to claim Houseperson’s
Benefit, policyholders would
need to be unable to, because
of illness or injury, other than a
deliberately self-inflicted injury,
to perform 2 or more of the 5
following tests - without the
help of another person, but,
with the use of appropriate
assistive or corrective aids or
appliances.
•Walking
Able to walk 200 metres on the flat without
having to stop or suffering severe
discomfort.
•Bending
Able to get into or out of a standard saloon
car and able to bend or kneel to pick up
something from the floor and straighten up
•Communication
Able to answer the telephone and take a
message.
•Reading
Having the eyesight required to be able to
read a daily newspaper.
•Writing
Having the physical ability to write legibly
using a pen or pencil.
Incapacity tests
FRIENDS® Protection
or
Unable to conduct a basic existence, which means being
confined to the home or hospital or being unable because
of illness or injury, other than a deliberately self-inflicted
injury, to cook, do light housework and dress yourself.
or
Shown to be suffering a psychotic or well-defined
mental illness which is medically uncontrollable despite
treatment by a Consultant Psychiatrist.
After a Career Break?
FRIENDS® Protection
A. If the policyholder returns to work within 5 years, they can
resume their Income Protection policy on the same terms and
conditions as before without any further evidence of insurability.
Or
B. If the policyholder does not wish to return to full time
employment, they can continue with the
Houseperson’s cover policy, again without any further
evidence of insurability.
Case Study
FRIENDS® Protection
Sarah is 31 years old and has an Income Protection
policy with Friends Provident.
She works as a Care Worker (class 3). She has
recently got married and plans to start a family at
some point in the near future.
At present, she has a Income Protection policy on a
Deferred 13 week basis and pays a premium of
£67.50 a month for the maximum allowable benefit
of £300 per week based on her salary of £24,400
per year.
Case Study
FRIENDS® Protection
At the age of 32, Sarah discovers she is pregnant. She has decided that
she would like to take a break from her Care Worker job and take a
couple of years off to look after her new baby.
Sarah remembers that she has a Career Break option built into her
Income Protection policy and telephones Friends Provident to find out
more information.
Case Study
FRIENDS® Protection
Sarah finds out that she can ‘suspend’ her Income Protection policy and take out
a Houseperson’s policy during her career break.
When she decides to return to work, she will be able to resume her Income
Protection policy on the original terms and conditions as before, including any
increases in benefit and premiums that would have taken place, without any
further underwriting.
Case Study
FRIENDS® Protection
The maximum sum assured she can have under Houseperson's Benefit is £300
per week, but this is the same as her existing contract.
Sarah’s existing Income Protection policy was taken out on a Class 3 basis due
to her occupation classification.
However, as Houseperson's Benefit uses Class 1 rates - for the same benefit,
sum assured and deferred period, her premium reduces from £67.50 to £36 per
month.
Case Study
FRIENDS® Protection
So that Sarah can exercise the Career Break Option, Friends Provident send her
a ‘Career Break’ application form.
Sarah will need to confirm what sum assured, deferred period and ceasing age
she requires for her new Houseperson's plan.
Friends Provident underwrite this new application, but only to ensure that the
terms and conditions are at least as favourable as those originally applied to her
Income Protection plan. Shortly afterwards, Friends Provident issue a new
Houseperson’s policy schedule to Sarah.
Case Study
FRIENDS® Protection
3 years later, Sarah decides to return to full
time employment.
After contacting Friends Provident, Sarah is
able to resume her Income Protection plan
on the same basis as she suspended it with
no further medical underwriting.
Career Break key messages
The Career Break allows policyholders to take time from work for any reason
FRIENDS® Protection
but continue to maintain a form of Income Protection.
Depending on rates and occupation classes, sometimes policyholders can
benefit from reduced premiums for the same sums assured!
The policyholder can choose new sums assured and a full range of deferred
periods to suit their circumstances when switching to the Houseperson’s
cover policy.
The policyholder can continue with a Houseperson’s cover policy if they
decide not to return to work.
Career Break is a valuable benefit automatically included in Friends® Income
Protection policies.