RL360 LifePlan

An independent review by our team of experts.

Review summary

RL360 LifePlan

RL360 is based in the Isle of Man, conducting business in Asia, Africa, the Middle East and the UK.

RL360 is part of the RL360 Group, which has 60,000 policyholders in 170 countries, in excess of $10 billion in assets under management, and 300 staff.

It is no longer part of Royal London (the UK group), separating from it several years ago.

RL360 provides offshore savings, protection and investment products for expats and local nationals around the world.

Overview

The R360 LifePlan is a unit linked regular premium whole of life insurance policy, which offers insurance for up to 2 lives assured.

You can choose from a range of options such as primary life cover that pays a cash sum (often referred to as the sum assured) on the death of the life assured and, if selected, critical illness cover that pays a cash sum in the event of a covered critical illness or medical procedure.

The RL360 LifePlan is a flexible life assurance protection policy that can be tailored to meet your requirements and address a number of different protection needs.

Quick facts: 

  • Protection policy – up to 15 benefits
  • USD 200 per month minimum
  • 4 policy currencies
  • Whole of life cover up to $7,500,000
  • Critical illness cover up to $750,000
  • Term cover element
  • Long-term care
  • Total and permanent disability

Family protection:

RL360 will provide a lump sum to your chosen beneficiaries upon your death.  This can help to ensure their financial protection in the years to come.

Business protection:

You can help to limit any potential financial impact caused by the loss or illness of key business partners, or to simply pay on-going commitments. 

Mortgage or loan protection:

Many lenders need security that their loan will be repaid in the event of your death or critical illness.

LifePlan has the flexibility to be assigned to a lender for this purpose.

Children’s plan:

You may insure the life of a child and pay the premiums necessary so that at the age of 18 years you can give them the gift of primary life and critical illness cover.

They can use this to protect their own families - or as security for home loans or any other financial obligations.

Based on a primary life cover format, critical Illness and supplementary term cover can be added to this policy to cover periods of higher liability (e.g. during the first years of mortgage payments).

A vanishing premium term is also an available feature as well as various combinations of family benefits depending on children etc.

The insurance policy has an invested element.

Premiums will increase to cover less than adequate investment performance.

If you are unable to pay increased premiums, your cover will stop and you may get significantly less than you put in.

In effect, you are risking your life ‘risk-reduction’ plan on the markets, which in some ways defeats the principle of insurance.

The fund selection of LifePlan is not mirrored, but consists of actively managed funds (which are highly unlikely to beat benchmarks) and must be chosen from a very limited list.

Fund costs are normally between 1.5% and 2%, with some performance charges up to 15%.  A 0.35% policy charge is also levied.

The key risk factor for individuals seeking flexibility or value is in the establishment charge which pays sales costs such as adviser commissions.

This eats up all premiums for the first two years.  Nothing is invested and you cannot get this money back.

From year 3 to year 10, you will pay 6% pa (this alone is highly likely to wipe out any growth in funds).

From year 11 onwards, the policy holder pays 2% pa on top of other fees.

Since RL360 was subject to a management buy-out and private equity cash injection, it has arguably had more ambitious international distribution policies which include the payment of very high levels of adviser commission.

This may bring with it a number of risks which potential clients should consider prior to entering a policy.

The pros

  • Combines different insurances

The cons

  • Expensive
  • Inflexible
  • Commonly mis-used
FAQs
Is the Isle of Man a good jurisdiction?

The Isle of Man, one of the worlds leading offshore financial jurisdictions, offering international clients scope for tax efficiency.

Isle of Man has an outstanding reputation for investor protection and supervision, resulting in an AA+ risk rating from Standard & Poor’s (as at November 2012) and an AAA rating from Moody’s (as at November 2010).

Policyholders are protected by the Isle of Man Compensation of Policyholders protection scheme.

However, this does not necessarily protect individual investors from poorly suited products.

When does the LifePlan from RL360 pay out?

LifePlan aims to pay a cash sum on the death or diagnosis of a defined terminal illness of the life assured.

• If selected at the beginning of the policy, LifePlan aims to pay a cash sum if the life assured is diagnosed with a covered critical illness or undergoes a covered medical procedure.

What are the main risks and disadvantages with RL360's LifePlan?

There are a few: -

The charges RL360 deduct from your policy may be higher than those shown in your Personal Illustration.

If that happens you may have to increase your premium payments to maintain the chosen benefits.

Future charges may also be higher than those shown in your Personal Illustration.

For example, premium collection charges may change, or switch charges may be imposed at a later date.

If the investment return is less than that expected by you and your financial adviser, you may have to increase your premium payments to maintain the chosen benefits.

If you choose not to increase your payments and your policy value runs out your benefits will cease.

The value of your policy is linked to your chosen investment funds, whose value may fall as well as rise and is not guaranteed.

If you stop paying your premiums early your cover may cease.

If you take a premium holiday and your policy value drops during that time, your benefits may be at risk.

If you change occupation or move country this could affect the level of premiums you need to pay.

Cover may not always be available for certain high risk jurisdictions or occupations.

What are all the potential benefits of LifePlan?

The benefits of LifePlan are split into three different categories.

These are Core Benefits (mandatory), Additional Benefits (these can be added onto the policy at an additional cost) and Added Extras (these are added onto the policy at no additional cost).

The benefits are as follows:

Core benefits

Primary life cover Life cover is the core benefit offered by LifePlan.

On the death of the life assured, a cash sum will be paid out.

The initial maximum sum assured is USD7,500,000 (or currency equivalent).

Additional benefits

Accidental death benefit

Accidental death benefit doubles the amount of life cover (both primary life and term) that is in force up to an initial maximum of USD500,000.

It is paid should the life assured die in an accident, or up to 90 days after due to any injuries sustained.

Critical illness cover

Critical illness cover will advance a portion of the sum assured if the life assured is diagnosed with a covered critical illness or undergoes a covered medical procedure.

Any amount can be selected between USD45,000 and the maximum of USD750,000 (or currency equivalent) at time of issue.

The maximum age at entry for critical illness cover is 59.

The waiting period before this benefit starts is 90 days after the policy is issued.

Term critical illness cover

Term critical illness cover allows the policy owner the option of purchasing critical illness cover so long as the policy owner has already purchased the term life cover.

The minimum and maximum amounts that can be taken are the same as the whole of life critical illness cover.

Term life cover

The policy owner can buy additional coverage on a term basis to cover any short term needs.

Any amount can be selected up to the maximum value of benefits of USD7,500,000.

This benefit is available on a limited term of between 5 and 61 years, although coverage cannot be extended beyond the life assured’s 80th birthday.

Waiver of premium benefit

While the life assured is injured or taken ill and unable to work in either their own or another suitable occupation for more than 6 months, waiver of premium will keep the cover going by paying the premiums automatically.

This benefit terminates at age 65 or the end of the premium payment term if earlier.

Added extras

Total and permanent disability

If critical illness cover is purchased for the life assured, the policy will also cover the life assured should they become totally and permanently disabled, and as a result are unable to return to any form of paid employment.

Long term care

If the life assured takes out critical illness cover; after the age of 65 the policy will cover the life assured should they need help carrying out their normal day to day activities.

Terminal illness benefit

Should the life assured be diagnosed with any illness that will lead to death within 12 months the sum assured will be paid out in advance.

Passive war cover

There is no exclusion for passive war risks. This means that if the life assured were the innocent victim of an act of war or terrorism then RL360 would consider the claim.

Repatriation benefit

In the event of the death of the life assured in a country other than their home country, LifePlan will pay out an immediate advancement of USD7,500 (or currency equivalent) of the sum assured to help with any associated costs.

Children’s critical illness cover

Where critical illness cover is purchased for the life assured, RL360 include up to 3 of their children for critical illness cover, provided they are in good health and between 1 and 18 years of age.

RL360 include up to USD15,000 of coverage free of charge.

Aeroplane cover

If the life assured dies as a fare-paying passenger on a commercial airline, RL360 double the effective primary life cover up to USD1,000,000 in addition to the sum assured.

This benefit has no cost to the policy owner.

Benefit indexation option

All whole of life related benefits (such as primary life and critical illness cover) can be indexed at a simple annual rate of either 5% or 10%.

If this option is selected, premiums must be indexed by at least the same percentage.

Premium indexation option

Policy owners can choose to increase their premiums at a simple annual rate of either 5% or 10% to increase their contributions to the fund values.

Guaranteed insurability option

LifePlan will expand with your family’s growing protection needs.

Upon notification that new members have joined your family, either through marriage or through birth, RL360 will increase the size of your sum assured.

There is no need to undergo further medical testing.

Temporary accidental death benefit

This benefit will provide temporary cover from when RL360 receive the completed application form and valid method of payment until you are in safe receipt of the policy schedule.

If the life assured were to die in an accident before the policy documentation is issued, RL360 would pay out a lump sum of up to USD75,000 (or currency equivalent).

Vanishing premium option

Policy owners can choose to pay for the policy over a specified period of time. This is often referred to as a vanishing premium term.

The option allows them to select how long they want to be paying premiums for.

Benefits can be indexed even if they are being paid for on a vanishing premium basis.

Can I take a payment holiday?

You can take a break from paying premiums as long as the value of the policy is at least twice the total annual premium.

Your policy will need to have sufficient value to fund the entire premium holiday that you are taking, otherwise the benefits may be at risk.

The charges for coverage will continue and premium payment will need to be restarted after the premium holiday ends.

Where is my money invested with the LifePlan?

After allowing for charges, your money is invested in the funds of your choosing, from a range of UK authorised and international collective investment schemes.

A full list of available funds can be found in the LifePlan Investment Guide.

You can currently switch between funds free of charge and redirect future premiums into new funds whenever you want.

Under LifePlan you may hold up to 5 individual investment funds at any one time.

Can I cash in part or all of my LifePlan at any time?

You can cash in part of your policy provided that the then remaining policy value is at least USD15,000.

You can also cash in your entire policy at any time after which your benefits will cease.

What are the charges with LifePlan?

The costs of setting up LifePlan are paid over the course of the first 2 years by not allocating your premiums to units.

From years 3 to 10 inclusive, 94% of your premiums are allocated to your policy.

From year 11 onwards 98% of your premiums are allocated to your policy.

There is a monthly maintenance fee which is currently USD7.50 for standard policies.

The amount will increase every year on the policy anniversary in line with the Isle of Man Retail Price Index.

For children’s plans, a monthly policy maintenance fee of USD15 (or currency equivalent) is deducted.

This fee continues at this rate over the lifetime of the policy, increasing every year on the policy anniversary in line with the Isle of Man Retail Price Index.

If a single premium injection is made 93% of the premium is allocated to your policy.

The cost of the life cover and any other benefits chosen are deducted from the value of your policy, on a monthly basis in advance.

The cost of providing benefits can be influenced by various lifestyle factors.

Your Personal Illustration takes into consideration any costs associated with providing these benefits.

A policy charge which is currently 0.25% of fund value is also payable each year on a quarterly basis in arrears.

An individual benefit charge may also be assessed depending on the different benefit selections you may make.

The fund(s) that are held within the Policy are subject to an annual management charge. The charge is levied by the external Fund Manager and will vary according to the fund chosen.

Customer reviews
Too many restrictions

At first glance I was impressed with the many benefits lifeplan offers...and the additionals with on extra charge.

But a closer look - too many restrictions, too complex. I just wanted a straight insurance plan so looked elsewhere.

I wonder how many people get sold on this when it's not what they want?

Expert verdict
Expert Assessment of RL360 LifePlan

We do not recommend this plan because we believe other more cost effective and flexible options exist.

If you already have the LifePlan from RL360, we recommend you have a free, no obligation X-Ray Review™ to give you the information you need to make a decision on the best way forward.

There are likely to be much more suitable solutions for you, at a far lower cost.

“Thank you AES International for helping me and my family with your low cost no-nonsense approach. It is refreshing!”

Kristian Petersson

“With this sort of service you also expect to be paying very high fees, but it’s just not the case. I would definitely recommend AES.”

Jake van den Dries

“In the short time that I’ve been using AES I’ve made nearly ten thousand pounds and couldn’t be happier!”

Jackie Pym

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