Registered Group Life and Dependants' Pension policy - Technical Guide.

Product Overview.

Unum's Registered Group Life and Dependants' Pension policy:

provides insurance benefits which may be paid as a lump sum or as a pension benefit to a spouse or other financial dependant(s) if a member dies in service;
allows employers and Trustees to enjoy the taxation advantages of providing benefits within the regulations established by HM Revenue & Customs (HMRC) for a Registered occupational pension scheme ("the scheme"). The definition of a Registered occupational pension scheme includes arrangements set up to provide benefits on death in service only;
offers a range of flexible benefit choices.

Technical Guide.

Technical Guide for 'Commercial customers' and their advisers.
This product is only available from appropriately authorised intermediaries who have signed our Terms of Business Agreement.
This document is a technical guide to the features of our Registered Group Life and Dependants' Pension policy product and should be read in conjunction with the quotation which accompanies it.
If anything stated in the quotation differs from what is in this guide, then what is stated in the quotation overrides the guide.
In the event of a discrepancy between the policy document, the quotation and the content of this guide, the wording of the policy document (including policy schedule) will prevail.
We have classed the customers for this product as "Commercial" within the context of the Financial Services Authority's (FSA) Insurance Conduct of Business (ICOB) Rules.

Full details of the insurance cover will be contained in the policy document (including policy schedule). The policy is issued subject to the Laws of England and any dispute shall be subject to the exclusive jurisdiction of the English Courts.

This product is available to insure the death in service liabilities under a Registered scheme. The legislation governing Registered occupational pension schemes is contained in the Finance Act 2004.

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This document does not provide definitive tax advice that can be relied upon in the specific circumstances of a particularPolicyholder or in respect of any member insured under the policy. This includes but is not limited to any potential liabilityto corporation tax, income tax, Lifetime Allowance Charge, Annual Allowance charge or the loss of Enhanced protection.Policyholders should take advice from their own professional advisers to ensure that they understand the impact of taxand related charges introduced by the Finance Act 2004 and subsequent related legislation.

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A. Terms Explained.

Actively at Work means that a candidate memberor member:

has not received medical advice to refrain from work and is actively following their normal occupation, and;
is working the normal number of hours required by their contract, either at their normal business or at a location to which they are required to travel for business.

An employee will be regarded as actively working if fully capable of so doing were it not for either a leave of absence previously authorised by his or her employer or the requirement for actively working falls on a day the individual is not contracted to work.

An employee must be Actively at Work at commencement of cover and for all increases in benefit.

Candidate Member means:

An employee of a company, or;
An employee or an equity partner of a partnership or Limited Liability Partnership (LLP), as appropriate, who may become a member on meeting the eligibility conditions.

Commencement date is the date from which wehave agreed to provide the quoted cover.

Conditional cover is a procedure by which we agree to provide the quoted cover from the required commencement date for a period of up to 30 days pending receipt of the information detailed in SectionE 1.1.7 "When will cover commence?".

Discretionary entrants are individuals who are to be included in the policy outside the usual eligibility criteria.

Early entrants are candidate members who are to be included in the policy before completing the service qualification period.

Free Cover Limit (FCL) is the threshold of insured benefit we declare in your quotation, below which no evidence of health is usually required, although Actively at Work requirements may apply. Section E 2.2 "Free Cover Limit" gives a full explanation of the terms and any conditions which apply to it.

A late entrant is a candidate member who wishes to join the policy after the date of their first opportunity to do so. Where eligibility is linked to membership of the employer's pension scheme, a late entrant is a candidate member who wishes to join the pension scheme more than 6 months after their first opportunity to do so.

Normal Contractual Retirement Age is the contractual retirement age normally applied by the employer to the employees or Age 65 if greater.

The policy accounting date is the date with effect from which the premium due for the next policy accounting period is calculated.

The policy accounting period is defined as the period from the commencement date of the policy up to the first policy accounting date and from one policy accounting date to the next policy accounting date.

The policy review date is the date when the premium rate and terms of the policy are reviewed and guaranteed for a further period (typically two years).

QAAF is the acronym for Quotation Acceptance Application Form.

Spouse means the surviving legal husband or wife or the civil partner of the deceased member.

Strict Actively at Work means that a candidate member or member:

has not received medical advice to refrain from work and is actively following their normal occupation;
is working the normal number of hours required by their contract, either at their normal business or at a location to which they are required to travel for business, and;
the candidate member must not have had more than 5 consecutive working days absent from work in the last 6 months, due to illness or injury.

An employee will be regarded as strictly actively working if fully capable of so doing were it not for either a leave of absence previously authorised by his or her employer or the requirement for actively working falls on a day the individual is not contracted to work.

The policy Terminal Age is the age at which cover under the policy ceases. The maximum Terminal Age is 70. However, where the normal contractual retirement age has not been extended for all employees and cover is offered beyond age 65, cover will cease at the earlier of age 70 or the member’s normal contractual retirement age.

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B. Your commitment as the Policyholder.

You must provide us with all the information we ask for when you apply for your policy, at your policy accounting dates, or when you make a claim. You must advise us if these details change. If you do not provide this information, we may not be able to pay your claims.
You agree to pay regular premiums on time in sterling.
You choose at the outset the conditions of eligibility that govern who can be covered by the policy.
You agree to abide by the conditions of eligibility set out in the policy.
You agree to notify us in writing if you wish to amend the eligibility criteria of the policy, for example, by closing the policy to new entrants.
You agree to notify us in writing if you acquire another company and you wish to cover the workforce of the new company under the policy.
You agree to notify us in writing if you dispose of a company whose members are covered under the policy and will no longer be covered under the policy.
You agree to notify us of any claims as soon as possible.
You agree to identify any discretionary entrants. (See Section A "Terms explained".)
You agree to supply us with all the information we ask for at a policy review date.
You must provide us with details of any member who is required to travel, as part of their job, by helicopter or where a number of members are required to travel as a group and the aggregate of their benefits insured under the policy is more than £10 million. If either of these situations occurs, you will advise the frequency, duration, destination and the exact benefit insured as special terms may be applied. You must provide us with current details, or where applicable, with details of such members where there is an expectation of such travel in future.

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C. Risk Factors.

The policy carries the following risks.

You should take legal advice on the need to outline the benefits provided by the policy in employees' contracts of employment and that the benefits, as promised, are not discriminatory.
For Example, the Employment Equality (Age) Regulations 2006 that came into effect on 01 October 2006 made it unlawful for an employer to discriminate directly or indirectly against an employee on any aspect of their employment or benefits, based on their actual age or their apparent age. The Regulations do not directly apply to insurance policies.
You will not be covered if you fail to comply with the terms and conditions of the policy or if you stop paying premiums. If you terminate the policy, we will pay valid claims that arose while cover existed andfor which premiums have been paid.
For all policies, the premium rate and policy terms and conditions will usually be guaranteed for 2 years. However, we reserve the right to amend these terms if, in the opinion of Unum, there is a significant change in the risk profile. This could include but is not limited to:
- A variance of 25 per cent or greater in the number of members or benefit insured;
- The inclusion of a new subsidiary;
- The disposal of a participating company or closure of a part of the employer's business;
- The inclusion of a new member category;
- A change in policy design such as an alteration of benefit level, terminal age or terms of eligibility;
- A change to the level or basis of the social security or income tax systems.
In the case of quotes for new or existing polices we reserve the right to review the terms offered if there is a 10 per cent or more change to the data provided to produce the quote.
You should ensure that the definition of dependant in your scheme's Trust Deed and Rules matches as closely as possible the definition of dependant in the death in service policy, otherwise there may be under-insurance of the Trustees' liabilities.
Where members are your employees, the benefits provided by your policy should be outlined in your employees' contracts of employment or pension scheme or group life assurance scheme details.
Extended Cover can be provided for a member beyond the Normal Contractual Retirement Age to the extent that there is such liability under the scheme’s Trust Deed and Rules. Section E 1.7.4 “Extended Cover" gives a full explanation of the terms and any conditions which apply to it.
We are able to provide cover from the date of a member's ill health early retirement to the extent that there is such liability under the scheme's Trust Deed and Rules, to a maximum of age 65.
We are able to provide cover for members who have been made redundant; our quotation will state the duration of the cover. Cover will cease immediately the member begins alternative employment. The maximum period of cover is 24 months.
If the number of members drops below five at any time, we reserve the right to cancel the policy at any subsequent policy accounting date.
You must provide us with details of any member who is required to travel, as part of their job, by helicopter or where a number of members are required to travel as a group and the aggregate of their benefits insured under the policy is more than £10 million. If either of these situations occurs, you will advise the frequency, duration, destination and the exact benefit insured as special terms may be applied. You must provide us with current details or, where applicable, with details of such members where there is an expectation of such travel in future.

Catastrophe limitation.

See Section E 6 "What is not covered?" for details of the catastrophe limit wording. The catastrophe limit is stated in the quotation. The current maximum catastrophe limit is £100 million.

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D. How does the policy work?

We require a minimum of five lives for a Registered Group Life and Dependants' Pension policy.
You must decide the type and level of benefit together with the eligibility conditions for the policy. You can choose different levels of cover, or "benefits", for different categories of member.
While premiums are being paid, we provide cover no matter how many claims you make. In the event of a catastrophe, there is an overall maximum of the catastrophe limit.
If you terminate the policy, we will pay valid claims that arose while cover existed and for which premiums have been paid.
You, the employer or Trustees, pay all the premiums.
You should provide us with the information we require when you make a claim.
The policy is held under a Trust with discretionary powers for the Trustees. (See Section E 1 "What factors should be considered in deciding what benefits to provide?") On request, Unum can provide specimen trust documentation.
We always pay the benefit to the Trustees (who may also be the employer).
The Trustees have absolute discretion to whom the benefits are paid, but must take into account (but are not bound by) the deceased member's wishes as stated in the member's completed Expression of Wish form (if applicable). Under the policy, once we have made a payment to the Trustees in settlement of a death claim, our responsibility stops.
Lump sum benefits paid by the Trustees under a discretionary trust do not form part of the deceased member's estate, and are normally free of Inheritance Tax. Benefit is paid by Unum to the Trustees and because it is separate from the member's estate, avoids the need for Probate or Letters of Administration. However, dependants' pensions will be treated as earned income by HMRC and, therefore, have tax deducted from them.
The guarantee period advised in your quotation applies to both the premium rate and the terms and conditions applicable to the policy. When the guarantee expires at the policy review date, both the premium rate and the terms and conditions of the policy are subject to review.

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E. Product details.

1. What factors should be considered in deciding what benefits to provide?

Most employers insure the death in service benefits to be provided by their Registered occupational pension scheme, under a Registered Group Life and Dependants' Pension policy. It is possible to insure a lump sum and if you choose also to insure a financial dependants' pension. It is also possible to insure a financial dependants' pension only. However you may choose to insure only a portion of those benefits and to provide the balance of the members' cover from any associated pension scheme.

1.1 Who can be covered?

A candidate member can become a member if they satisfy the conditions of eligibility defined in the scheme rules. If the Trustees want to cover them under the policy they must also meet the definition of being Actively at Work (see Section E 1.1.3 "Actively at Work").

These conditions also need to be satisfied if you, the employer, wish to increase the cover of existing members by amending the scheme rules.

1.1.1 Conditions of eligibility.

Conditions covering entry to the policy must be selected. For example:

the minimum and maximum entry ages allowed for new entrants and, if a minimum number of years' service is required, the applicable level of service.
the categories of members you wish to be covered and to what benefits you want each category to be entitled.
the date when new entrants will be covered and when existing members will be eligible for increases in insured benefits; this might be:
- the policy accounting date (annual entry);
- the first day of the month (monthly entry), or;
- immediately, if all other eligibility requirements of the policy are satisfied (daily entry).

If cover is dependent on membership of the employer's pension scheme, then the current eligibility requirements of the pension scheme must also be provided.

The FCL will usually apply to all eligible members. See Section E 1.1.5 "Switch Terms for a policy with existing members on special terms". Otherwise, evidence of good health will be needed before we can provide cover.

The definition of eligibility must be clearly stated in all cases. Membership is compulsory for all candidate members within a defined category or categories. Eligibility conditions covering policy entry ages, entry dates and service requirements must be the same for each candidate member within a defined category.

Part-time and fixed-term candidate members and partial retirees may also be included in the policy if they satisfy the above conditions.

Before cover is effective, we normally require evidence that a member is Actively at Work. (See Section E 1.1.3).

1.1.2 Early entrants and Discretionary entrants.

Medical evidence will be required for these entrants in all cases.

1.1.3 Actively at Work.

We may waive the need to be Actively at Work before insurance cover with Unum starts dependent upon the number of lives insured under the policy and the insured nature of the scheme (i.e. whether it is a new scheme, or a previously insured scheme, or a previously self-insured scheme).

We will always require details of any member who has been absent from work for more than three months before setting up a policy, irrespective of whether Actively at Work has been waived or not.

Actively at Work provisions are as set out in the table on page 7.

1.1.4 Late entrants.

Candidate members joining within 6 months of their first opportunity can join subject to being Actively At Work and the FCL applies. If a candidate member joins within 6 to 12 months of their first opportunity to do so then they can be covered provided they are Actively At Work and they complete a scheme member’s application form for underwriting any benefit in excess of £250,000 (or in excess of the FCL if lower).

If joining after 12 months then the candidate member must complete a scheme member’s application form for underwriting the whole benefit.

All benefit amounts include capitalised dependants’ pensions.

Completion of the scheme member’s application form may result in further medical evidence being required.

No cover is provided for benefits being underwritten in respect of a Late Entrant until we issue acceptance terms.

Actively at Work Provisions:
Number of lives	New schemes	Existing insured schemes	Existing self insured schemes
5-19	Applied - cover will not be provided until the member has been back working their normal hours for 10 consecutive working days	Applied - cover will not be provided until the member has been back working their normal hours for 10 consecutive working days	Applied - cover will not be provided until the member has been back working their normal hours for 10 consecutive working days
20-99	Applied - cover commences immediately upon the return of the member to active employment	Waived - for existing insured benefits Applied - to new members and increases in benefits	Applied - cover commences immediately upon the return of the member to active employment
100-499	Waived - for all members	Waived - for existing and new benefits and new members	Applied - cover commences immediately upon the return of the member to active employment
500+	Waived - for all members	Waived - for existing and new benefits and new members	Waived - for existing and new benefits and new members

1.1.5 Switch Terms for existing members insured on special terms.

We will require details of the previous insurer's FCL and details of those members whose cover has been subject to special terms by the previous insurer, showing for each member:

name.
date of birth.
gender.
full underwriting decision (including exclusions and percentage loadings, amount of benefit above which the loading/restriction applied).
sum assured "on risk" at termination.

Special terms refer to adverse medical underwriting decisions and includes premium loadings, restrictions (including where imposed for non-provision of medical evidence) and declinatures.

Where cover is being transferred from another insurer to Unum on the same policy basis, we will accept benefit for members covered under the existing policy on medical underwriting terms that are no worse than those provided under the previous insurer's policy, subject to our maximum levels detailed below. The actual monetary amount charged in respect of a medical loading may differ from that used by the previous insurer because our underlying premium rates may differ from those used by the previous insurer.

We will provide switch terms for currently insured levels of benefit based on the previous insurer's underwriting decisions of up to a maximum of £3 million benefit per member (including capitalised dependants' pensions), subject to any members to be included having been underwritten by the previous insurer for a medical rating of not more than +400% Extra Mortality. We must specifically approve benefits in excess of £3 million, ratings above 400% Extra Mortality and for any lives with benefits above FCL whose principal residence is outside the European Union before cover can be provided.

If we quote a higher FCL than that applied by the previous insurer, our FCL will not apply to members whose cover has been previously subject to special terms . All future increases in benefit for these members will be medically underwritten. Existing members who have been underwritten and have been accepted at ordinary rates will obtain our (higher) FCL. Any future increases in benefit above the Unum FCL will be subject to medical underwriting.

1.1.6 Switch Terms for existing members insured on normal terms.

We will limit our acceptance on normal terms to a value of 125% of our quoted FCL where the current insured benefit has been accepted by the previous insurer without medical underwriting, for example, where itwas within their previous higher FCL.

1.1.7 When will cover commence?

We will provide Conditional Cover on receipt of:

written instructions from your intermediary to assume risk from the commencement date;
satisfactory written answers to any Risk Relevant caveats and any Price Relevant caveats that were included in our quotation, and;
details of the Pension Scheme Tax Reference Number.

This is subject to receiving a fully completed QAAF signed by the Policyholder and Deposit premium or Direct Debit mandate during the period of Conditional Cover. The QAAF incorporates a Direct Debit mandate that should be signed by the Policyholder and a Customer Verification Statement that, if requested, should be signed by your intermediary.

In order to continue cover after the period ofConditional Cover, in addition to the fully completed QAAF, we require membership data at the commencement date and a completed Activelyat Work declaration if applicable.

1.2 When will cover cease?

1.2.1 Under normal circumstances.

We cannot cancel the policy unless:

the number of members insured under the policy is fewer than five;
premiums are overdue, or;
you fail to disclose all the information we ask for when applying for the policy, administering the policy, or when claiming for benefit in respect of a member.

You can cancel the policy at any time, provided you do so in writing. Cover will then cease and you will not be liable to make payments for any period after this date. Cancellation cannot be backdated.

If the policy is cancelled, we will still consider and pay valid claims that arose while cover existed up to the date of cancellation, provided that there are no premiums outstanding.

Cover for any member will cease on whichever is the earliest date if:

they retire early (unless cover has been included in the policy for members who have taken early retirement), or;
they reach the Terminal Age (unless Extended Cover is included. See Section E 1.7.4 "Extended Cover"), or;
they reach age 70, or;
they leave the employer's service (unless cover for members who have been made redundant has been included. See Section E 1.7.2 "Redundancy").

1.2.2 Ceasing Conditional Cover.

All the information and data we require to set up the policy, including the fully completed QAAF and Deposit premium or Direct Debit mandate, must be provided as requested within the 30 day period of Conditional Cover. Cover will cease if the information has not been provided within this period.

A premium will be charged for the 30 day period of Conditional Cover provided. The premium will be calculated on a pro-rata basis, based on the time we have been on risk.

1.3 What types of cover are available?

1.3.1 Lump sum benefit.

Cover is usually provided as a multiple of each member's salary to match the scheme basis. Alternatively, it can be a fixed sum for each member. It can vary for different categories of member.

Requests to include salary sacrifice within the earnings definition can be considered on a case by case basis.

1.3.2 Financial dependants' pension.

A pension can be provided for the member's spouse, children and other financial dependants. You can choose pension benefits based either on a proportion of the deceased member's prospective pension or a percentage of the deceased member's earnings. The basis and definition of dependant may vary across different categories of member, if required.

You can choose whether you want to insure pension increases or not (see Section E 1.6 "Can pension benefits in payment be inflation protected?").

There is no reduction in the dependants' pension if the spouse is more than ten years younger than the deceased member.

1.4 When are pension benefit payments due?

Dependants' pensions are payable monthly in advance from the date of the member's death. Benefit payments are made either to the Trustees or, if requested by the Trustees, direct to the financial dependants.

1.5 For how long will financial dependant pension benefits be paid?

Normally, pension payments are made to a spouse or other adult financial dependant until their death. However, in cases where there are surviving children, payment may continue until each child has reached age 18 (or up to age 23 if in receipt of full-time educational or vocational training). These age limits do not apply to a surviving child who, at the date of the member's death was, in the opinion of Unum, dependent on the member because of physical or mental impairment. In such a case benefit may continue until death. The precise terms covering the payment of dependants' pensions are usually set out in the Scheme Rules.

1.6 Can pension benefits in payment be inflation protected?

Yes. Pensions in payment can increase as follows:

increase by 0 per cent, 3 per cent or 5 per cent per annum compound during the period of payment;
change in line with whichever is the lower figure of 2.5 per cent or the percentage change in the RPI over the previous 12 months;
change in line with whichever is the lower figure of 5 per cent or the percentage change in the RPI over the previous 12 months;
change in line with the RPI over the previous 12 months, with a maximum increase in any one-year of 12 per cent.

Any increase is applied annually on the anniversary of the commencement date of the pension.

Please note, that to satisfy the Pensions Act 2004, a dependant's pension payable from a defined benefit pension scheme must increase by the lower figure of 2.5 per cent or the percentage change in the RPI over the previous 12 months. This liability can be fully or partially insured.

1.7 Are any special cover options possible under the policy?

Yes. Full details must be provided if any of the special cover options below are required. We will confirm the terms of that cover in writing, if granted.

All requested special cover options must be included as part of the benefit basis and described in the Scheme Rules.

The following special cover options are available:

1.7.1a Temporary absence excluding during Extended Cover.

Where an absent member is still regarded by the employer as remaining in service, the benefit may be maintained:

in cases of illness or injury - until the Normal Contractual Retirement Age;
during Statutory absences such as maternity, adoptive, paternity, unpaid parental leave - for a maximum period of 36 months not exceeding the Normal Contractual Retirement Age;
for any other reason such as sabbaticals, unpaid, compassionate leave - subject to prior agreement by Unum, for a maximum period of 36 months not exceeding the Normal Contractual Retirement age.

For increases to benefit during absence for illness or injury, maternity, adoptive, paternity and unpaid parental leave; salary increases will be accepted under Unum's cover provided that:

the increase is in line with general pay increases for the employer subject to a maximum of 5 per cent per annum compound; and
the increase is salary related, i.e. we will not cover increases for a flat benefit.

For increases to benefit during absence for sabbaticals, unpaid and compassionate leave; salary increases will not usually apply in these circumstances; this can be considered on a case by case basis when considering cover for this type of absence.

1.7.1b Temporary absence during Extended Cover

Where the member is still regarded by the employer as remaining in service after the Normal Contractual Retirement Age, for the following reasons cover can be continued up to the earlier of either the individual’s new contractual retirement age or 1 year from the date the absence began:

in cases of illness or injury
statutory absences such as maternity, adoption, paternity and unpaid parental leave
any other reasons such as sabbaticals, unpaid compassionate leave - subject to prior agreement by Unum

1.7.2 Redundancy.

It may be possible, for an additional charge, for cover to continue for a member who has been made redundant. This would be for a defined period, for example three months, and would cease immediately on re-employment. The normal maximum period is 24 months not exceeding the policy Terminal Age. If selected, the employer continues to pay premiums for these members. This must be selected at the start of cover provided by Unum and will apply to all members within a selected membership category.

1.7.3 Early retirement.

If a member retires early through ill health, for an additional charge, cover of a lump sum benefit may continue up to a maximum age of 65, even if the policy Terminal Age is greater. If selected, the employer continues to pay premiums for these members. This must be selected at the start of cover provided by Unum and must apply to all members within a selected membership category.

Early retirement cover is not provided for dependants' pension benefits.

1.7.4 Extended Cover.

If a member works beyond the Normal Contractual Retirement Age, we will assume that the intention is for cover to be provided for all employees doing the same. If cover is provided selectively to only some employees working beyond the Normal Contractual Retirement Age then those employees will be treated as discretionary members.

Where cover is provided to all employees working beyond the Normal Contractual Retirement Age, cover will be extended for benefits up to the FCL, providing the member concerned has met the Strict Actively At Work requirement on the Normal Contractual Retirement Age. Please note, for cover to be extended we must receive confirmation within 2 months of their Normal Contractual Retirement Age that they met the Strict Actively At Work requirement.

Please note if cover is required and the member does not meet the Strict Actively At Work requirement, in order to gain Extended Cover we will need to medically underwrite the member concerned. Again you must advise us within 2 months of their Normal Contractual Retirement Age that the Strict Actively At Work requirement was not met.

Where Extended Cover is required and the member currently has benefit above the FCL, benefits in excess of the FCL will be reviewed and we will confirm any additional requirements we may have once we have received their Strict Actively At Work declaration.

In all the above cases if we do not receive the Strict Actively At Work declaration within 2 months of the Normal Contractual Retirement Age, cover will be deemed to have ceased. Any reinstatement will be subject to the rules outlined later.

Please note we will not be able to extend cover beyond the Normal Contractual Retirement Age for any member who has previously had benefits either declined, restricted, or postponed. However, where the decision was the result of underwriting never having taken place, cover may be provided after medical underwriting.

Reinstating Cover for employees already over the Normal Contractual Retirement Age:

Providing the employee has been in continuous active service since reaching the Normal Contractual Retirement Age and cover is requested within 3 months of reaching the Normal Contractual Retirement Age, cover can be reinstated up to the FCL, subject to the employee being Actively At Work on the date the change is requested. Please note this change would be expected to apply to all employees working over the Normal Contractual Retirement Age. Where any of the criteria mentioned above cannot be met, then medical underwriting would be required for considering if the employees can be reinstated.

New Employees aged over the Normal Contractual Retirement Age:

Can join subject to the normal Actively At Work requirements for benefits up to the FCL.

All employees working above the Normal Contractual Retirement Age who remain members (excluding discretionary members) will be included within the unit rate, and the FCL applies (subject to rules above). We will include any members working beyond the Normal Contractual Retirement Age in a category where the Terminal Age will be set to 70. Please note however, cover will only be available to 70 if that is the member’s new contractual retirement age.

Members who have gone through the process above at the Normal Contractual Retirement Age who have new contractual retirement ages between the Normal Contractual Retirement Age and 70, can subsequently extend cover further to a maximum of 70. This is subject to their being Actively At Work on the contractual retirement age from which their contract is extended- eg an employee allowed to work beyond the Normal Contractual Retirement Age initially has a new Contractual Retirement Age of 66 which is renewed annually for a year at a time, can remain a member providing they are Actively At Work at age 66, 67 and so on.

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2. Setting up the policy.

2.1 Process for setting up the policy.

We prepare a quotation based upon the risk specification supplied by your intermediary together with:

the membership data.
claims history over the last five years (if previously insured).
occupation and location profile of the members to be covered under the policy.
details of any members who have had benefits declined or have had adverse underwriting decisions or special terms applied.
details of any members who have been absent from work for more than three months.

We require the membership data to be as up-to-date as possible and to show details that relate to a date within the last 12 months of the quotation request date.

Your intermediary must contact us in writing to advise us that you wish us to go on risk for your policy with effect from a specified date in line with our quotation. We will accept risk immediately after midnight, so for example for a 1st January commencement date we go on risk at 00.01 a.m. on 1st January subject to satisfactory answers to any specific caveats shown in our quotation. We will not agree to backdate acceptance of risk.

You should note that we are unable to assume risk without:

full address and postcode information for all policy members at their usual place of work. This data must be provided in order that the sum assured at each postcode can be calculated.
satisfactory written answers to any Risk Relevant caveats and any Price Relevant caveats that were included in our quotation.
details of the Pension Scheme Tax Reference Number.

Once you have accepted our quotation, you will need to provide the following to enable us to set up your policy:

a fully completed QAAF signed by the Policyholder
membership data at the commencement date
Actively at Work declaration, if applicable
Deposit premium or Direct Debit mandate

Where special cover options have been selected (see Section E 1.7 "Are any special cover options possible under the policy?") individual details of members to whom special cover options apply must be provided.

Where the basis of risk differs from our quotation, we will advise you of any additional requirements and the revised premium.

2.2 Free Cover Limit.

Group Life policies are designed to cover all candidate members who satisfy the conditions of eligibility and any Actively at Work requirements set out in your policy. We will declare a threshold, called the FCL, below which no evidence of health is usually required, although Actively at Work requirements will apply.

FCL only applies to candidate members who join the policy immediately on their first opportunity to do so, or, within six months of their first opportunity to do so if eligibility is linked to membership of the employer's pension scheme. Acceptance at any other time will be subject to the provision of satisfactory medical evidence.

If a category of membership includes fewer than five members, then a FCL will not apply to these benefits.

The FCL is normally reviewed at each policy accounting date.

If the policy FCL subsequently increases, this will not apply to any member who has been accepted on special terms previously (i.e. has had cover over the previous FCL restricted, or has had medical loadings applied, or who has previously been declined cover).

A dependant's pension is capitalised for medical underwriting purposes using conversion factors which vary by the rate of escalation. The capitalisation factors are guaranteed for the same period as the underlying rate table or Unit Rate and will be reviewed at the end of that period in the light of prevailing interest rates and market conditions.

The conversion factors are also referred to as capitalisation factors, and the dependants' pension that has been converted into an equivalent lump sum as a capitalised dependants' pension.

Our quotation will state the FCL which applies to your policy. The current maximum FCL is £1 million sum assured per member.

Where the death in service cover is linked to membership of a pension scheme, the FCL will also depend on the percentage of eligible candidate members who join the pension scheme; this is called the scheme take-up rate. If we do not know the take-up rate at the time we prepare our quotation we will assume that it is at least 75%; if it is actually less, then our FCL will be reduced or we may decline to quote.

2.3 Cover in excess of Free Cover Limit.

If a member's total sum assured including capitalised dependants' pensions (if applicable) exceeds the FCL, the excess will not be covered until the member provides satisfactory medical evidence to Unum.

We cannot guarantee cover for any individual whose total sum assured exceeds £3 million; for these members, we require the following information in order that we can decide whether we are willing to assume risk:

age;
benefit level last medically underwritten;
date last medically underwritten;
insurer at that time;
insurer's decision;
currently accepted benefit level.

2.4 What happens if death occurs before we have agreed full cover?

Where a member's benefit is subject to underwriting because it exceeds the policy FCL, we provide Temporary Cover for a maximum period of twomonths for accidental death only in respect of the amount being underwritten.

In the case of a valid claim, we pay the full benefit amount on the accidental death of an eligible member where the total sum assured does not exceed £3 million across all group life policies insured with Unum (including capitalised dependants' pension benefits, if applicable). Where the accidental death only total sum assured in respect of a member exceeds this limit, the benefit payable is restricted to £3 million.

The accidental death cover starts from:

either the date the member joins the policy with benefits above the FCL, or;
the effective date of an increase in sum assured above FCL.

The accidental death cover ceases on the first date either of the two following events occur:

we issue acceptance terms following completion of medical underwriting, or;
the two-month period of accidental death cover expires.

If a member dies after the accidental death cover period and before we have agreed full cover, benefit is restricted to:

In the case of new business.

Either our quoted FCL or, if the scheme was previously insured, any different amount that the member was covered for and which we have agreed to accept without additional medical underwriting, as set out in Sections E 1.1.5. and E 1.1.6.

In the case of existing business.

The amount on risk with us immediately prior to the effective date of the increase currently being underwritten.

Accidental death cover pending underwriting is not provided to:

discretionary entrants.
early entrants.
late entrants.
any member that has been subject to restricted terms imposed either by us, or by a previous insurer.
any member requiring Extended Cover, who cannot meet the Strict Actively At Work requirement at the Normal Contractual Retirement Age

A new member of a policy that has no FCL is treated as a discretionary entrant for the purpose of underwriting. Once we have agreed full cover, a discretionary entrant is treated the same way as an ordinary member and is granted temporary accidental death cover the next time underwriting is required for an increase in cover.

2.5 Evidence of health to be provided before candidate members or members are covered.

We usually only need to collect evidence of health for those:

whose benefits exceed the FCL;
who are joining outside of the normal eligibility conditions (see Section E 1.1 "Who can be covered?"), such as discretionary entrants and early entrants;
who require Extended Cover and cannot meet the requirements laid out in section 1.7.4;
who are in a membership category with fewer than five lives;
who have previously had cover declined, restricted or loaded.

These candidate members or members will be asked to complete an application form before their benefits can be considered by Unum. Further information may be requested depending on the information supplied.

If we require further information about a member located overseas, we will contribute an amount towards the cost of that further information from the overseas country. This would be the equivalent cost of obtaining similar information in the UK.

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3. What premiums will be charged for the cover?

3.1 How will premiums be calculated?

3.1.1 What factors determine the rate used to calculate premiums?

The premium charged will depend on a number of factors. These include the nature and level of the benefits to be provided and details of the members to be insured, such as, but not limited to:

level of benefits.
eligibility and entry conditions.
rate at which (if any) dependants' pension benefits increase in payment.
age and gender of the eligible members.
occupation, industry and locations of eligible members.
claims history over the last five years, if the cover has been insured previously.
an eligible member's annual business mileage, if in excess of 20,000 miles per annum.
our current minimum annual premium.

3.1.2 Single Premium policies (between 5 and 19 members).

Premiums will be calculated for each member according to our current age-related premium rates. Premiums are recalculated at each policy accounting date and are dependent on the age of the member then. Premium rates increase with age.

The underlying rate table is usually guaranteed until the second policy accounting date following commencement unless a shorter guarantee is stated, and subject to review thereafter. A new rate table may apply at the end of this period.

On request, we may be prepared to issue Single Premium policies where there are more than 19 lives.

3.1.3 Unit Rated policies (20 members or more).

The annual rate of premium applicable to all members is calculated at the start of the guarantee period and is referred to as the Unit Rate.

The first year premium notified at the commencement date of the policy with Unum is a provisional premium. It is based on the total sum assured at the commencement date multiplied by the Unit Rate (which is expressed as per thousand pounds of sum assured).

Where dependants' pensions are insured, the first year premium notified at the commencement date of the policy with Unum is a provisional premium based on the total dependants' pension benefit multiplied by the dependants' pension Unit Rate (which is expressed as a percentage of dependants' pension benefit).

Our terms are usually guaranteed until the second policy accounting date following commencement, unless a shorter guarantee period is stated and are subject to review thereafter. A new rate may apply at the end of this period.

3.2 Will there be any unexpected extra premiums?

You may be asked to pay additional premiums if:

you have members whose cover exceeds the FCL and who have therefore been asked to complete an application form, or;
you have candidate members who are joining outside the normal eligibility conditions, such as early or late entrants.

These additional premiums may, for example, be due to a particular medical condition or hazardous pursuits the member may undertake. If applicable, these additional premiums will become payable from the date the medical underwriting decision is made.

3.3 Is there a discount for good claims experience?

Past claims experience is a factor in assessing the premium applicable to an existing policy and therefore, for a large policy, a good claims history will usually be reflected in the premiums charged.

3.4 What commission is allowed for in the premium?

Any commission paid to your intermediary is a percentage of the gross premiums paid; the premium shown in our quotation reflects the levelof commission payable.

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4. How does the policy accounting work?

The administration of your policy usually operates on a one-year accounting period.

Premiums are normally paid annually by cheque, or monthly by Direct Debit.

Our quotation states an estimated first year cost assuming an annual premium is paid and that all members can be accepted for their full benefit entitlement at ordinary rates. The annual premium shown in our quotation excludes any additional premiums, for example, as a result of medical loadings for members whose cover is subject to special terms due to adverse medical underwriting and non-medical loadings for members with hazardous pursuits.

Our quotation also states the expected first monthly premium assuming payment is monthly by Direct Debit, and that all members can be accepted for their full benefit entitlement at ordinary rates.

The following adjustments are applied for non-annual payments. Our preferred payment method is by Direct Debit.

Adjustments for non-annual payments:
Frequency	Payment by Direct Debit	Payment by Standing Order
Monthly	3%	5%
Quarterly	2.5%	5%
Half-Yearly	1.5%	5%

4.1 What information is required for accounting purposes?

At the commencement date and at each policy accounting date, a list of all members will be required showing:

name;
date of birth;
gender;
salary or earnings;
sum assured;
dependants' pension (if applicable);
membership category;
address and postcode of workplace(s);
occupation;
date of joining or date of leaving (if applicable).

Individual details are required immediately for those members with benefits over the FCL or for candidate members joining outside the normal eligibility conditions of the policy (see Section E 1.1 "Who can be covered") or for members whose cover is subject to special terms.

4.2 How are accounts adjusted for members who join, leave or have benefit increases during the year?

If a member's earnings increase, this will normally be reflected in the benefit, provided it remains below the FCL and the member is Actively at Work, if applicable (see Section E 1.1.3 "Actively at Work").

Where requested, increases in benefit arising from salary increases during the policy accounting period can be covered automatically but if benefit exceeds the FCL, satisfactory evidence of health will be needed before the increase can be considered by Unum.

Details of new entrants will be required at the time of joining if their benefit exceeds the FCL or if they are not joining within the normal eligibility conditions of the policy (see Section E 1.1 "Who can be covered?").

4.2.1 Single Premium Costed policies.

A premium adjustment will be calculated reflecting the level and duration of cover we provided during the policy accounting period. Any premium adjustment for members who join or leave or whose benefit increases is applied at the next policy accounting date.

4.2.2 Unit Rated policies.

A premium adjustment will be calculated at the end of the current policy accounting period based on the average total salary roll or total benefit roll for all members covered by the policy during this period. Effectively this means salary and changes in membership are treated as if they occurred at half way through this period. Any premium adjustment for members who leave, join or whose benefit increases is applied at the next policy accounting date.

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5. Claiming benefits.

This section deals with common questions that arise following a member's death.

5.1 Notification of Death.

Please notify us of a member's death as promptly as possible by telephoning our Customer Care department on telephone number: 01306 873243.

We will issue you the appropriate Notification of Death forms.

5.2 Evidence required to process a claim.

The evidence we require to process a claim includes the following:

a completed claim form signed by the Trustees or administrators of the scheme.
member's original death certificate.
member's original birth certificate.
evidence of membership and earnings.
for dependants' pensions, original copies of a marriage certificate for a spouse and birth certificates for the spouse and any other financial dependants' who are to receive pension benefits and a copy of the latest available annual benefit statements. Trustees are asked to confirm the identity of financial dependants.
a Pension Payment Form providing details for the payment of financial dependants pensions.
a completed dependency questionnaire signed by the Trustees or administrator of the scheme in cases where there is a pension payable to a financial dependant, to ensure they are financially dependent upon the deceased.

5.3 Claims processing.

Upon receipt of all the necessary documentation, we will process your claim.

Lump sum payments will be made to the Trustees of the scheme. Dependants' pension payments are paid on a monthly basis gross to the Trustees of the scheme. Alternatively, pension payments may be paid monthly net of basic income tax, and direct to the beneficiary's bank account.

5.4 What happens to claims in respect of members based overseas?

Any claim in respect of members based abroad, and foreign nationals, will be paid in sterling.

5.5 What happens to pensions in payment if the policy is discontinued?

If you cancel your policy with Unum, then all pensions in payment, as a result of a member's death in service which occurred while you were covered, will continue to be paid.

5.6 How to appeal a claim decision.

An appeal process is provided. In the case of an appeal, Unum will consider any additional evidence submitted in support of that appeal. Any appeal should be made in writing within 3 months of notification from Unum that a claim has been declined.

The Financial Ombudsman Service provides an independent dispute resolution service for eligible disputes. Where you remain dissatisfied with the outcome of your appeal, you can contact the Financial Ombudsman Service at the address below. Your legal rights and those of the member are not affected if this organisation is contacted.

The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London
E14 9SR

Tel: 0845 080 1800

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6. What is not covered?

There are no exclusions in the policy. All causes of death, including suicide, are covered.

However, there are limitations to the overall cover of the policy due to accumulation of risk considerations in the event of a catastrophe.

6.1 Our maximum liability in the event of a catastrophe.

The maximum liability of Unum for a Policyholder group in respect of more than one death (irrespective of the date and place of death) attributable directly or indirectly to a catastrophe shall be as advised in your quotation.

Policyholder group is defined as the companies, entities, Partnerships or Pension Fund Trustees which are all part of the same group of companies, entities, Partnerships or Pension Fund Trustees as the Policyholder during the period of the policy which includes but is not limited to the Policyholder and its associated subsidiary or affiliated companies, entities or Partnerships and any Pension Fund Trustees associated with the Policyholder that may exist from time to time.

6.2 What is a catastrophe?

A catastrophe shall be defined as one originating cause, event or occurrence or a series of related originating causes, events or occurrences, which results in more than one death, irrespective of the period of time or area over which such originating causes, events or occurrences take place. Unum shall be the sole judge as to what constitutes a catastrophe.

6.3 How will we deal with notification of multiple deaths?

Allocation of benefits under the Policyholder group resulting from more than one death, attributable directly or indirectly to a catastrophe and thus subject to the maximum liability limit, shall be in the chronological order of the dates upon which written notification of each death claim is received by Unum. Insofar as more than one such written notification is received by Unum on the same day and in total, the amount would cause the maximum liability limit to be exceeded, Unum shall be entitled in its sole discretion to pay such claims on a reduced pro-rata basis according to the remaining balance of the maximum liability limit such that Unum's total liability for such claims shall not exceed the maximum liability limit.

6.4 How will we include Dependants' Death in Service pensions?

In the case of a dependant's pension or other benefit paid in a regular benefit payment basis as opposed to a lump sum basis, for the purposes of determining whether or not the maximum liability limit will be exceeded, or for the purposes of calculating the benefit to be paid where death claims are to be paid pro-rata as described in Section E 6.3, the regular benefit in question will be capitalised using the capitalisation factors applicable on the date of the death.

The capitalisation factor applicable to your policy will be stated in your quotation. The capitalisation factors are guaranteed for the same period as the underlying rate table or Unit Rate and will be reviewed at the end of that period in the light of prevailing interest rates and market conditions.

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7. Can cover be provided for a member who is not in the UK?

We are prepared to cover members travelling or working overseas or seconded to other organisations, provided that:

they meet the eligibility conditions of cover for the policy, and;
employees have a contract of employment with a UK registered company (which is covered by the policy), and;
if seconded, then the period overseas must not exceed 3 years or 10 years for employees seconded to another company within the same group of companies as their UK employer; we may be prepared to extend the cover period on a case by case basis, and;
all premiums must be paid in sterling.

For lives based overseas the nationality and countries worked in need to be declared for each employee at policy commencement and review.

Benefits will be paid to the UK Policyholder in sterling.

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8. Taxation.

8.1 Payment of premiums.

Premiums paid by the employer to insure death in service benefits for members are a trading expense and can be offset against Corporation Tax.

Premiums are not regarded as a benefit in kind for members.

Premiums paid by the employer to insure death in service benefits for equity partners are unlikely to be treated as a trading expense and therefore will not be offset against Corporation Tax.

An equity partner should obtain tax relief on the premiums they pay directly for their own cover through "deduction at source". The equity partner will pay their premium, net of basic rate tax relief. The scheme administrator is then entitled to recover the basic rate tax deduction from HMRC.

8.2 Payment of benefits by the Trustees.

Under a Registered scheme, lump sum benefits are usually tax-free if, when combined with all other payments made from Registered arrangements both past and current, the amount is within the Lifetime Allowance applicable at the date of death. Some members may have elected Primary transitional protection in which case a higher Personal Lifetime allowance may apply.

Beneficiaries of lump sum benefits are liable for any Lifetime Allowance Charge – in proportion to their share of the overall benefits paid on the member’s death. The personal representatives of the member are responsible for ascertaining whether there is a chargeable amount.

Dependants' death in service pensions, however, are regarded as earned income and are subject to tax prior to payment to the spouse and/or financial dependant(s), as advised by HMRC.

This information is based on our understanding of current tax legislation and HMRC practice at the time of going to press. However, employers should refer to their intermediary for specific advice on the tax implications for their company. The tax treatment detailed above may not apply to overseas members of the policy.

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9. Continuation option.

This option is not available.

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10. Third Party Rights.

Third Party Rights under the Contracts (Rights of Third Parties) Act 1999 do not apply.

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11. Surrender value.

The policy does not acquire a surrender value.

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12. Complaints handling.

We want you to be entirely satisfied with your Registered Group Life and Dependants' Pension policy. If you do have a query or complaint, then in the first instance please contact the intermediary who arranged the policy for you. If there was no intermediary, please contact Unum directly.

If this does not resolve the matter then please write to:

Head of Customer Feedback
Unum
Milton Court
Dorking
Surrey
RH4 3LZ

Tel: 01306 887766

If the matter remains unresolved, you can, subject to eligibility, contact the Financial Ombudsman Service at the address below. Your legal rights are not affected if you contact this organisation.

The Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London
E14 9SR

Tel: 0845 080 1800

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13. Compensation.

If we cannot meet our liabilities you may, subject to eligibility, be entitled to compensation under the UK Financial Services and Markets Act 2000. Information about this is available on request from us.

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14. Further information.

About Unum.

Unum is the UK's leading provider of group income protection insurance, with over 35 years of experience. Our critical illness andlife insurance products enable our customers to purchase complementary protection solutions that together make up a comprehensive protection package.

Our income protection customers benefit from our expertise in the specialist areas of disability, rehabilitation and return-to-work. We enable individuals to protect their incomes, ensuring their financial security if they are unable to work because of illness or injury. For employers, we safeguard one of their most valuable resources by helping employees return to work following long-term absence.

At the end of 2007, Unum protected in excess of 1.7 million lives through more than 16,700 schemes. During 2007 we paid total benefit claims of £273 million – of which more than £190 million related to income protection claims.

Our US parent company, Unum Group, traces its history back to 1848 and is one of the leading providers of employee benefits products and services, and the largest provider of group and individual disability income protection insurance in the United States. Premium income for Unum Group and its subsidiaries exceeded $7.9 billion in the year ended 31 December 2007, with reported revenues for the group exceeding $10.5 billion. Total assets were $52.4 billion at 31 December 2007.

For more information please visit http://www.unum.co.uk

Unum Limited is authorised and regulated by the Financial Services Authority.
Registered in England 983768. Registered office: Milton Court, Dorking, Surrey RH4 3LZ.
Tel: 01306 887766 Fax: 01306 881394 Textphone: 01306 887784.

We monitor telephone conversations and e-mail communications from time to time for the purposes of training and in the interests of continually improving the quality of service we provide.

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