Santander Group is the largest Eurozone’s bank in terms of market capitalisation. Moreover, it is one of the largest financial institutions in the world. The bank has almost 180,000 employees; its revenues in 2010 were more than €42 billion, while profit was more than €8 billion in the same year. The subsidiary called Santander UK plc. is also one of the leading UK financial services providers. It also offers to its clients various insurance services provided by Aviva company. These services include: home, travel, car insurance policies as well as life insurance, guaranteed protection for over 50s and personal accident cover.
Santander offers three main plans: life insurance, life & critical insurance and guaranteed over 50s policies. These policies offer three main options: level cover, mortgage decreasing cover and family decreasing cover. Alongside these policies there is possibility to choose various benefits, which are offered to Santander’s clients. Moreover, it is important to remember that none of these policies have cash in value. Thus, if the policy ends or is terminated before the end of the term, all the person will not gain anything from paying the premiums.
This policy will pay out if the person dies or is diagnosed with a terminal illness when there are still at least 12 months left until the end of the policy and the person is expected to die within 12 months. The person can choose three types of life insurance plan: level cover, mortgage decreasing cover and family decreasing cover. Level cover can be used to protect one’s family as the amount of cover will not change during the term of the policy. Mortgage decreasing cover is usually used to protect the repayment of the mortgage. If this type of policy is selected, then the amount of cover will constantly decrease until the policy ends.
Life and critical illness insurance is constructed in such way that it pays out in case the insured person dies or is diagnosed with a critical illness (from the list Santander provides in the policy contract) and manages to survive for at least 14 days. Moreover, children’s critical illness insurance is also included in the plan. Thus, it means if one of children is diagnosed with an applicable illness, the policy will also pay out the sum assured. The pay out in this case is usually equal to 50% of the normal sum assured. However, the maximum limit is £25,000. Furthermore, if the person is diagnosed with a terminal illness when there are more than 12 months left until the end of the policy and the person is expected to die within next 12 months, the Santander will also pay out the amount of cover agreed in the contract.
There are some conditions for people who want to have life and critical insurance policy. First of all, the person must be between 18 and 59. Moreover, even though the policy can last from 1 to 40 years, the term of the insurance must end until the person is 76 years old. Thus, it means that if the person now is 56 years old, the maximum term of the policy cannot be longer than 20 years. One more restriction is that maximum amount of cover is £2,000,000.
Santander also offers many additional benefits that can be included in the life and critical insurance policy: life change, replacement, separation benefits, waiver of premiums and indexation options. These additions are offered to the clients who has the insurance contract for at least 6 months. Life change benefit means that if the person feels that he needs more cover because of some circumstances, he can ask and get that without providing any additional information to Santander. It is possible to increase the cover up to 2 times or up to £200,000 (whichever is lower). This increase can be made until the person reaches the age of 55 and it is not possible to increase the cover if the waiver of premium option has been used before.
Replacement benefit can be used for people who used joint life cover. When the first of partners dies, the joint policy ceases to exist. Normally, for other person it becomes much harder to take out a new single life insurance. However, with Santander’s replacement benefit, the person can take a new single policy without a need to provide any additional information.
Separation benefit means that if two people take out a joint life cover and after some time they separate, the joint policy can be divided into two new single life insurance plans. This benefit can be used only until people reach the age of 55 and within 90 days of separation (divorce and etc.). Moreover, it should be remembered that new policies must end before the 70th birthday. Furthermore, life change benefit cannot be included if separation benefit has been used. It must also be remembered that separation benefit can be used only if a proof of separation is provided to Santander.
One more benefit is an indexation benefit. It can be used for either level life cover or decreasing life cover. However, if the person chooses to include this kind of benefit when he has taken out level life insurance, then the premiums will also increase each year. With indexation benefit, the sum assured increases in line with RPI each year for up to 10%. The premiums will increase by 1.4 times more than the sum of cover each year for up to 14%. Furthermore, if a decreasing type of cover is chosen then even though that the cover will increase in line with RPI, the premiums will stay the same throughout the term of the insurance.
The last benefit is waiver of premiums. It adds a possibility to waive the premiums if the person is incapable of working for more than 3 months because of an illness or an injury until he can return to his job. The limitation is that the person who wants to use this benefit must be between 18 and 54 when the life insurance is being underwritten.
The plan offers a guaranteed acceptance with no medical questions asked for those who are between 50 and 85 years old. The person only needs to pay fixed premiums during the term of life insurance policy. Moreover, these premiums vary from only £6 a month to £74 a month and the person gets the first month of the insurance contract free. Furthermore, triple travel accident is included into the policy. It means that if the person dies while travelling, three times higher amount of cover will be paid to the dependents. However, if the person dies within the first two years of the policy, the dependents will only get an amount of money 1.5 times higher than the premiums paid.