What is it?
- Included free with our 30-day Notice account
- If you die while you have savings in an eligible account, your beneficiary can ask us to make a life savings insurance claim to increase the money in your savings.
- We will then pay the insurance settlement, along with your savings, to your beneficiary.
- Life savings insurance is separate from the Financial Services Compensation Scheme (FSCS).
How does Life Savings Insurance Work?
- Money you save in your 30-day Notice account is automatically insured.
- Tell us who your beneficiary (next of kin) is.
- Only money you save before your 80th birthday is covered.
- If you have a loan outstanding when you die, we will use your savings and the insurance settlement to pay off your loan. Everything left – including both the savings balance and insurance settlement – will go to your beneficiary.
How much insurance will my beneficiary receive?
If your beneficiary asks us to make a claim, we will split your savings into three pots:
- Money that you saved before your 65th birthday
- Money that you saved on or after your 65th birthday, but before your 80th birthday
- Money that you saved on or after your 80th birthday
To calculate the amount of the insurance settlement, our insurers will take 100% of the amount you saved before turning 65, then they will add 25% of the amount you saved between turning 65 and turning 80. Money you saved from your 80th birthday onwards is not covered by the insurance.
The maximum settlement is £5,000.
-
16-65:
100%
-
65-80:
25%
-
80+:
0%
Who provides the insurance?
- South Yorkshire Community Bank has a contract with CMutual, who provide the life savings insurance.
- All insurance claims are assessed by CMutual, so we cannot guarantee whether or not they will accept a claim.
- There are some circumstances in which we cannot make a claim.
Insurance calculation examples
Example 1: Simple example
Lindiwe saved £1,000 before turning 65, then another £400 by the time she turned 80. Her total savings balance when she died was £1,400.
If Lindiwe’s partner decides to claim on the insurance, the settlement will be made up of:
100% of the money saved before age 65: 100% of £1,000 = £1,000
25% of the money saved before age 80: 25% of £400 = £100
Lindiwe’s partner will receive the insurance settlement (£1,100) and the balance of Lindiwe’s savings (£1,400), for a total of £2,500.
Example 2: Example showing the maximum settlement amount
Anita saved £4,800 before turning 65, then another £2,000 by the time she turned 80. Her total savings balance when she died was £6,800.
If Anita’s children decide to claim on the insurance, the settlement will be made up of:
100% of the money saved before age 65: 100% of £4,800 = £4,800
25% of the money saved before age 80: 25% of £2,000 = £500
The total is £5,300. Because this is more than £5,000, the settlement will be capped at £5,000.
Anita’s children will receive the insurance settlement (£5,000) and the balance of Anita’s savings (£6,800), for a total of £11,800.
Example 3: Complex example
Rob saved £6,000 by the time he was 65. When he was 67, he withdrew £5,500; so out of the money he saved before turning 65, £500 is left. He then saved another £3,000 by the time he turned 80, and another £300 after that. His balance when he died was £3,800.
If Rob’s next of kin claims on the insurance, the settlement will be made up of:
100% of the money saved before age 65: 100% of £500 = £500
25% of the money saved before age 80: 25% of £3,000 = £750
The £300 Rob saved after turning 80 is not covered by insurance.
Rob’s next of kin will receive the insurance settlement (£1,250) and the balance of Rob’s savings (£3,800), for a total of £5,050.