Scottish Provident is part of Royal London group. The company itself was founded in 1837. In 2000 it was acquired by Abbey Group, which was bought by Bank Santander in 2004. Royal London group acquired Scottish Provident in 2008. Scottish Provident is one of the leading insurance providers in UK. Moreover, it is viewed as a market leader in critical illness policies’ products. The company offers two plans of insurance for its clients: the first one is called Pegasus and the second is named self-assurance.
Scottish Provident is one of the leading providers of life, critical illness, income protection and unemployment cover. They have won more awards than any other protection provider.
Pegasus is a whole of life insurance plan offered by Scottish Provident. It is one of the leading plans in UK insurance market. The plan is constructed in such way that it pays a cash lump of sum if the claim is accepted. It is possible to choose cover from the death, critical illness cover and disability. Moreover, Scottish Provident allows its customers choose the benefits they want. The possible choices are life cover or critical illness cover. Life cover acts like a normal whole of life insurance policy, whereas critical illness cover gives financial protection when terminal illness is diagnosed. It is possible to choose both of these benefits together.
Furthermore, there are extra benefits that are included. First of all, while the application is being processed, free cover is given to a person. Even more, if the person chooses to have critical illness benefit, the children critical illness benefit will be included with no additional costs. It is also possible to choose the retirement cover. With this benefit, the amount of cover is adjusted to be of more significant size in later years of the policy. Alongside these benefits so called lifeline (help with tax, legal, medical questions) is provided to the clients.
Another option that is provided by Scottish Provident to its clients is self-assurance plan. The main aim of this plan is to provide protection from the financial distress cause by death or critical illness. The amount of cover can be selected to be paid out either as a lump sum of money or as monthly payments (for business plans instalments can be chosen). It is also should be mentioned that various benefits can be included in self-assurance plan. However, the most popular ones are these: life cover, critical illness cover, income protection and unemployment cover.
Life cover (also known as death benefit) will give a financial protection to the dependents if the insured person dies or has been diagnosed with a terminal illness (if the illness meets the definition provided by Scottish Provident). It is a basic choice for a clients of Scottish Provident. But as life cover benefit protects only from death it may not be wise to select only this benefit. It can be mentioned that usually critical illness cover is chosen alongside life cover. As this benefit pays out if the critical illness, terminal illness or disability is suffered a much wider protection is given to a client.
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Other popular choice of Scottish Provident clients is income protection benefit, which is also known as disability protection income. The main purpose of this option is to insure the person if he becomes unable to perform some of his work tasks because of disability, sickness or accident. One more possible choice is a unemployment benefit. It has a similar purpose as income protection benefit as it also replaces part of monthly income. However, the difference is that this benefit insures the person from he becoming unemployed.
Scottish Provident also gives freedom to choose various conditions of the contract: term or the amount of cover. Firstly, the person can choose that the policy would last from 5 to 40 years. However, it must be taken into an account that it can last only up to when person is 85 years old for life cover, critical illness cover and when he is 65 years old for income protection or disability benefits.
Furthermore, the person can choose fixed term or a renewable term for a policy. If the fixed term is chosen, the conditions of the insurance policy will stay throughout the time span of the contract. But if the renewable term is chosen, the conditions of the contract will be reviewed each 5 or 10 years. It is important to remember that as person gets older the premiums are likely to become higher. Moreover, the person’s medical condition can become worse and in some cases it can be hard to renegotiate the contract under favourable conditions.
One more thing that can be chosen is how the benefit will change during the term of the policy. It is possible to choose three options: level, increasing or decreasing benefits. If the level benefit is chosen than the amount of cover will not change throughout the policy. Other two options give an opportunity to adjust the amount of cover to be changed if it is convenient to the person. Increasing benefit allows increasing the benefit by retail price index change each year (maximum amount is 10% each year). If the decreasing benefit is chosen than the longer the policy continues, the smaller the cover gets. It is usually used to protect the other members of the family from financial distress if the person has mortgage or other financial obligations.