WHAT IS IT?

What is Disability Cover?

It pays you a monthly income if you’re too unwell or injured to do, on a full or part-time basis either (a) your current job or (b) a job that the provider decides you’re potentially well-matched for. When deciding on your ability to perform a role the provider will take into account your training education, experience and the medical condition you’re diagnosed with.

If you need to make a claim you’ll be guided through the assessment process.

We’ve organised our Disability Cover through Legal and General (L&G). If you need to speak to someone you’ll get the details on the key contacts list.

What is incapacity?

L&G defines a member as incapacitated ‘if an illness or injury prevents you from doing all jobs which are appropriate to your experience, training or education’.

You can see the full policy here.

Note: This is a Group Policy that contains some standard information. Therefore it’s highlighted that your cover under this Policy applies as follows:
Page 5, Part 2, Section 1 ELIGIBILITY(b): All members of the Retirement Savings Plan (whether contributing members or not) are covered by this Policy
Page 7, Part 3, Section 1 BENEFIT PAYABLE: The value of the Employment and Support Allowance is not deducted from any payment you get under this Policy

You can see a summary of the policy here and the policy glossary here.

Who can get it?

If you’re a member of our Retirement Savings Plan you’ll already be a member, whether or not you’re actually paying anything into the plan.

If you’re on a permanent contract you can elect cover when you start as part of your New Joiner Window or at the Annual Election Window.
If you’re a fixed term contractor you can only make elections in your New Joiner Window; you can’t make changes in the Annual Election Window.

If you’re part of a Defined Benefit Pension Plan, you’ll be part of the Long-Term Disability scheme instead. You can get Disability Cover if you like, but you’ll need to opt out of any Defined Benefit Pension Plan and join the Retirement Savings Plan first. You need to be actively at work when you elect to opt out of the DB pension plan in order for your Disability Cover to be in place.

How long is my New Joiner Window?

It’s 3 months from when you join. It closes at the end of the month in which you submit your first election.

WHAT'S IN IT FOR ME?

What’s in it for you?

Peace of mind that you’re covered if you’re unable to work due to illness or injury. You’ll still get an income, and support to get you back to work as quickly as possible.





WHAT ARE MY OPTIONS?

How much will you get?

Depending on what level of cover you choose, you’ll either get 50% or 75% of your ValueAccount. If you’ve just joined the Bank, we’ll automatically give you Level 2 cover but you can change this in your New Joiner Window. Otherwise, you can only make changes during the Annual Election Window. Once you pick your cover level, it’s fixed for a year until the next window.

We’ve listed how much each level pays, and how long the cover lasts, below.

There are four levels:

Level 1: 50% of your ValueAccount for five years (this is the minimum level you can have)
Level 2: 50% of your ValueAccount to State Pension Age (this is the default level you start at)
Level 3: 75% of your ValueAccount for five years
Level 4: 75% of your ValueAccount to State Pension Age

If you’re aged 66 or over you can only get cover to age 70

When you turn 66, we’ll automatically move you down a level if you’re at level 2 or 4.That’s because you’re no longer eligible for cover to state pension age and you’ll receive a longer period of payment if you ever need to claim.

You can check your Government state pension age at www.gov.uk/state-pension-age.

We don’t offer Disability Cover for anyone over 70 so we’ll stop it at the Annual Election Window before your 70th birthday.

What will it cost you?

That depends on what level of cover you choose, and how old you are.

We’ve listed the charges and explained how we calculate them below. You’ll not pay tax for level 1 but for levels 2, 3 and 4 you’ll pay tax on the additional charge beyond the cost of level 1 cover.

Monthly charges are per £10,000 of cover

We’ve provided some examples below.


Your age at 30 September 2019
     Level 1

50% of ValueAccount for 5 years (minimum cover)
£
Level 2

50% of Value Account to State Pension Age (default cover)
£
Level 3

75% of ValueAccount for 5 years (charge on top of level 1)
£
Level 4

75% of ValueAccount to State Pension Age
(charge on top of level 2)
£
up to 25
4.88
5.44
0.78
2.47
26-30
4.88
6.35
1.68
6.11
31-35
4.88
7.40
2.48
10.05
36-40
4.88
8.96
3.58
15.84
41-45
4.88
11.08
5.17
23.79
46-50
4.88
14.06
7.93
35.47
51-55
4.88
17.60
13.39
51.56
56-60
4.88
16.43
24.99
59.64
61-65
4.88
4.88
33.48
33.48
66-70
4.88
N/A
44.82
N/A

As you get older

When you move into the next age bracket, you’ll pay the charges in the new row in the table, which are generally higher.

How we calculate the charges

  Up to 5 years Up to State Pension Age

50% of ValueAccount
Minimum cover rate (column 1) Default cover rate (column 2)
75% of Value Account Minimum cover rate for the first 50% + Additional rate for the extra 25% (column 3) Default cover rate for the first 50% + Additional rate for the extra 25% (column 4)

Here are a few examples

In all of these examples, we’ve used someone who’s turning 43 at their next birthday, with a ValueAccount of £30,000.

During the Annual Election Window, and if you’re a new joiner, you can log in to RBSelectOnline and see what the different charges will be for you by playing with the options.

Level 1

For the minimum level of cover, the charge is £7.32 a month. Here’s how we work that out:

50% benefit is: £15,000 (£30,000*50%).
Charge for level 1 cover is £4.88 for every £10,000.

So the calculation is:

£4.88*(£15,000/£10,000) = £7.32


Level 2

The charge is £16.62 a month. Here’s how we work that out:

50% benefit is: £15,000 (£30,000*50%).
Charge for level 2 cover is £11.08 for every £10,000.

So the calculation is:

£11.08*(£15,000/£10,000) = £16.62


Level 3

The charge is £11.20 a month. Here’s how we work that out:

75% benefit is: £22,500 (£30,000*75%).
Charge for the first 50% is based on £15,000.
Then the charge for the increase to 75% is based on £7,500 (£22,500 - £15,000 = £7,500)

The charge for level 3 cover is £4.88 for every £10,000 for the first 50%. Then the increased rate of £5.17 on top.


So the calculation is:

£4.88*(£15,000/£10,000) + £5.17*(£7,500/£10,000) = £11.20
 


Level 4

The charge is £34.46 a month. Here’s how we work that out:

75% benefit is: £22,500 (£30,000*75%).
Charge for the first 50% is based on £15,000.
Then the charge for the increase to 75% is based on £7,500 (£22,500 - £15,000 = £7,500)

The charge for level 4 cover is £11.08 for every £10,000 for the first 50%. Then the increased rate of £23.79 on top.

So the calculation is:

£11.08*(£15,000/£10,000) + £23.79*(£7,500/£10,000) = £34.46

 


HOW DOES IT WORK?

You have to be ‘actively at work’ for your cover to start

That means that you’re covered as long as you’re at work for at least one full day after your cover officially starts (that includes actually being at work, along with authorised absences like holidays). So, for example, if  you’ve been on a long term absence and you’re phasing back to work, you’ll need to have finished the phase back and be back to your normal working pattern for at least a full day before your cover kicks in. If you’re not actively at work for at least one day you won’t have any cover in place.

What is actively at work?

L&G defines this as ‘you must be in full active employment, physically and mentally able to perform all the duties associated with your normal job on the day your cover is going to start’.

You can see the the full policy here.

Note: This is a Group Policy that contains some standard information. Therefore it’s highlighted that your cover under this Policy applies as follows:
Page 5, Part 2, Section 1 ELIGIBILITY(b): All members of the Retirement Savings Plan (whether contributing members or not) are covered by this Policy
Page 7, Part 3, Section 1 BENEFIT PAYABLE: The value of the Employment and Support Allowance is not deducted from any payment you get under this Policy

The same applies if you increase your level of cover: you’ll need to be actively at work and able to perform all the duties of your normal job for at least one day before your new level kicks in (although you can lower your level without being active at work).

If you are a member of a Defined Benefit Pension Plan and choose to opt out, you must be actively at work on the day you elect to opt out in order for Disability Cover to commence when the opt becomes effective. If you are not actively at work when opting out, you will have no Disability Cover in place.

How do you make a claim?

If you’re off sick for a long time, your line manager will handle the process for you – you don’t need to do anything. In terms of how long it takes, every case is unique. It depends on your circumstances but as a rule of thumb, you can start the claims process when you’ve been off for 12 consecutive weeks but payments won’t start until after 26 weeks.  If you’re off sick for a long time, we’ll stay in touch with you throughout and help you through the process.

How do you change your level of cover?

If you’ve just joined the Bank, we’ll automatically give you Level 2 cover but you can change this in your New Joiner Window. Otherwise, you can only change during the Annual Election Window. Once you pick your cover level, it’s fixed for a year until the next window.

If you want to increase or decrease your cover

You can increase your cover levels, except straight from 1 to 4. And you can decrease your cover to the minimum cover at level 1.

What happens if you leave the Bank?

We’ll stop your cover on the day you officially stop working for us.

Is there an upper limit on how much you can get?

Yes. You can’t get more than £425,000 a year and if you need cover of more than £150,000 there is an extra process to go through. If your ValueAccount is more than £300,000 a year and you have 50% cover, or £200,000 and you have 75% cover, you’ll need medical underwriting.

The Bank works with Mercer when medical underwriting is required, so they’ll be in touch if that’s the case for you. Mercer will explain the process and confirm that whilst you go through medical underwriting, you’ll be limited to cover of £150,000.

Would you get taxed on the disability payments?

Potentially, yes. The payments will be included in your tax and National Insurance calculations.

What happens after five years on the scheme?

After you’ve been getting Disability Cover for 4.5 years your manager will arrange a meeting to discuss next steps including whether there’s anything we can do to help you come back to work. Sometimes there isn’t, and this means we may dismiss you at this meeting and your employment with the Bank will end when you’ve had Disability Cover for 5 years.

Any associated colleague benefits will cease when your employment ends, except:
  • If you’ve elected Disability Cover to State Pension Age and you’re still eligible after 5 years, the insurer will offer to pay you directly after your employment ends (you’ll continue to get paid by the insurer rather than through payroll). The insurer will then be your contact for Disability Cover.
  • If you continue to be eligible for Disability Cover after your employment ends, we’ll also give you the opportunity to join the Extended Life Cover scheme. This provides you with continuous life cover after leaving the Bank (as long as you continue to be in receipt of Disability Cover payments). We’ll write to you and let you know if you’re eligible at the time and how much it will cost.