Life: endowment, unit-linked, annuities and beneficiaries

Life policies are sold through ordinary products with the line set to Life. The plan chosen on the product (Products > Rules for this line) decides how the policy behaves: term, whole life, endowment, unit-linked, annuity, credit life or group life.

Setting up a life product

On the product, choose Life as the line, then in Rules for this line:

• Plan: what kind of life policy it is.
• Term: in years. Left empty, the dates on the quote decide.
• Cash value by policy year (endowment and whole life): the share of premiums paid that the policy is worth in each year. Years in between take the last value given.
• Surrender charge by policy year: the share of the cash value kept when the policy is surrendered.
• Loans up to and Loan interest: how much can be lent against the cash value, and at what rate.
• Default fund split and Premium allocated to units for unit-linked plans.
• Annuity paid and Guaranteed for for annuities.
• Contestable period and Suicide exclusion: a death inside these periods is flagged for review when the claim is checked.

A life policy runs for several years: one premium invoice is raised for each year of the term, and each is due on the policy anniversary.

The life record

Issuing a life policy creates its life record, listed under Lines > Life policies. The record shows the plan, the sum assured, the premiums paid, the cash value today, loans, and the maturity date. Its tabs hold the loans, benefit payments, unit transactions and annuity instalments.

Beneficiaries

On the policy, the Beneficiaries tab lists who is paid on death and their shares. Change beneficiaries replaces the nomination as a whole:

• Shares must add up to 100%.
• A beneficiary under 18 needs a guardian.
• A nomination marked Irrevocable cannot be changed unless you confirm that the irrevocable beneficiaries have agreed in writing.

Earlier nominations stay on the tab with the dates they applied, so you can see who was named on any date.

Cash value, loans, surrender and paid-up

• Lend against the policy gives a loan up to the limit set on the product. Interest is charged monthly, and Repayment records money paid back.
• Surrender shows the cash value, the surrender charge and any loan deducted before you confirm. The policy is cancelled, future premiums are cancelled and the payment is recorded.
• Make paid-up stops future premiums and reduces the sum assured in proportion to the premiums paid.
• Pay the maturity pays the sum assured (or the paid-up amount) on the maturity date. Maturities due are also listed each day for the team.

Death claims

A death claim on a life policy has Approve the death benefit and Pay the beneficiaries. The benefit is the sum assured (the reduced cover for credit life, or the fund value if higher for unit-linked) less any loans. Approval and payment are done by two different people. Each beneficiary is paid their share, and without beneficiaries the payment goes to the estate.

Unit-linked plans

Lines > Unit funds lists the funds with their bid and offer prices; New price adds a day's price. When a unit-linked premium is paid, the allocated part buys units at the offer price in the policy's fund split. The policy's value is its units at the bid price. Switch between funds moves a share of the units from one fund to another, and Fund split for new premium changes where future premiums go. Fund management charges are taken monthly by cancelling units.

Annuities

On an annuity, Set the annuity records the purchase price and the instalment, and the instalments are scheduled. Due instalments are paid each day (or with Pay instalments due). Annuitant died stops the instalments after the guaranteed period; those inside it continue to the beneficiaries.

Group and credit life

Group life covers the members on the policy as a multiple of their salary; Loan and group terms sets the multiple and the rate per 1,000 of cover. Credit life follows the loan balance, which falls over the term; the cover on any date is shown on the life record.

Limits

Cash values, loans and benefits follow the tables on the product. The system does not hold mortality tables or calculate reserves for individual life policies.