Stratum protection for life

Content
1. Introduction
2. Financial protection to meet your needs
3. Protection for quality of life
4. Investment Funds
5. Flexibility to meet future changing needs
6. Additional layers of protection
7. Further information about Stratum
8. Further details
9. How much critical illness cover do I need?
10. The financial consequences

Introduction

It is impossible to predict what your future holds. You would want to do everything possible to ensure that you and your loved ones are financially secure.

Layered financial protection against the unknown
You have worked hard to get where you are today, achieving a prosperous career, a lifestyle that you value, a beautiful home and a family that you love - but despite how careful you have been, there may be something that has been overlooked. What would happen if you were to suffer a serious illness, become disabled or indeed die?

Despite taking care, you cannot always prevent some of these things happening to you. But you can reduce the financial impact that they might have on You and your family. Stratum is a financial protection policy that provides a lump sum payment on the diagnosis of a critical illness and or upon terminal illness or death. Stratum's simple but innovative structure can be tailored to meet your individual protection needs exactly.

By taking the necessary steps now, you and your family can be secure in the knowledge that should a life crisis occur the necessary financial means will be available.

Stratum - a layer of financial protection that could be a lifeline just when it is needed most.

Stratum is a unit linked flexible whole of life policy which provides a guaranteed cash sum, or the value of the policy if greater, on a selected event happening.

Financial protection to meet your needs

Stratum is available in three different versions each reflecting the type of protection cover required:

• Life Cover - providing a cash sum on the diagnosis of a terminal illness or in the event of death.
• Critical Illness Cover - providing a cash sum on the diagnosis of a critical illness only.
• Life and Critical Illness Cover - providing a cash sum on the diagnosis of a critical illness and/or on the diagnosis of a terminal illness or in the event of death. You can select to have a different level of critical illness cover to that which you have selected for life cover. On a critical illness claim the level of life cover will reduce accordingly.

• Standard - is the level of cover that should be supportable throughout life without the need to adjust premiums at each Policy Review.
• Maximum - provides the highest amount of cover for a given level of premium. If you select Maximum Cover your level of premium will increase significantly at each Policy Review.
• Age Basis - is the level of cover that should be supportable up to a selected age (between 60 and 65) without the need to adjust premiums at each Policy Review.

It is possible to pay premiums in excess of the Standard Cover premium to enhance future cash values or facilitate the Self-Funding option.

Stratum is a whole of life policy, which means that it does not have a maturity or expiry date. This gives you the flexibility to maintain your cover as long as you want. Stratum can be used to provide protection for one or two people and, unlike other protection policies, can be tailored to specifically match your own protection needs.

Protection for quality of life

A critical illness can strike at any time and will invariably result in major changes to your day to day routine. Stratum's critical illness cover is comprehensive and will pay out if you suffer from any of the illnesses or conditions listed.

In addition to these conditions, critical illness cover will pay out if you become totally and permanently disabled. This valuable protection provides cover for such disabling illnesses as Rheumatoid Arthritis, Multiple Sclerosis and Parkinson's Disease.

You may consider that you have adequate life cover from other policies you have taken out. Stratum can provide protection for critical illness cover only thereby complementing any existing life cover you may hold. You can elect to cover your three oldest children providing they are between the ages of 3 and 17 years old for critical illness cover, free of charge.

Full details of the above listed critical illness conditions are covered in the Guide to Critical Illness and Disability Cover that is available from your financial adviser on request.

Investment Funds

Although Stratum is designed to provide protection, it is an important feature that, after an initial period, your premiums are invested into a chosen investment fund. For example, an increasing investment value will help to keep your policy's costs firmly under control, as well as providing a cash return should your circumstances change.

There is a range of broadly based Sterling or US Dollar managed funds from which to choose:

• Adventurous Managed Fund
• Balanced Managed Fund
• Cautious Managed Fund

Further funds are available, details of which can be found in the Information Guide. More details of further individual funds are given in the Investment Fund Guide. The value of units can go down as well as up. Past performance is not necessarily a guide to future performance. Where a fund invests in overseas securities, the unit prices may fall as well as rise purely on account of exchange rate fluctuations.

Different people have different protection needs that will probably change over time. With Stratum you can choose the right level of protection cover for you. You can increase or decrease the level of cover if your circumstances change. Figure 1 illustrates the protection-investment balance that you may face over time.

Flexibility to meet future changing needs

You can keep pace with the rising cost of living by choosing to have the level of your cover increased each year by selecting the Automatic Cover Increase option. By choosing this option your cover increases automatically without the need to provide up-to-date information on your health at every increase.

If you wish to increase your cover and you haven't chosen the Automatic Cover Increase option, you will need to provide up-to-date information about your health. However, on marriage or the birth or adoption of a child you may increase the level of cover, up to certain limits, without giving extra health information.

Financial circumstances can change, for example a growing family will put temporary pressures on your finances, and it may be necessary to stop paying premiums for a short period of time. In such circumstances, and dependent on the value of your Stratum, You may elect to stop paying your premiums but continue to receive protection cover from Stratum.

It is also possible to change who is covered by Stratum. You can add a life, such as your spouse to ensure that you are both protected, or you can remove a life for instance on divorce or the break up of a business partnership. You may also change the life assured on a single life policy. And finally you can change the event basis from first event to second event. A change to who is covered by Stratum may have tax consequences. Your financial adviser will provide further information.

Additional layers of protection

You can choose to include Waiver of Premium with your Stratum. Then, if you are unable to continue paying your premiums, due to an illness or an accident, we will pay your premiums for you. This maintains your original level of cover. This benefit can be added to your policy at any time, but you will have to provide evidence of your good health.

Death may occur when you are away from home as a consequence of an accident. The probability of this increases if you travel frequently with your job or enjoy an international lifestyle. Your dependants may need additional funds at such a time to cover associated costs. If life cover is included in Your policy you can also choose to include Accident Cover which will provide an additional lump sum that should cover such associated costs.

Many people decide that they only want to pay premiums for a limited period but want the protection to continue after they have stopped paying premiums. It may be that they only want to contribute up to their retirement or over a selected period of 10 to 15 years. The SelfFunding option enables you to do just this if Standard Cover or Age Basis Cover has been selected. Premiums will obviously be higher to reflect the shorter payment period. Your financial adviser will be able to provide you with further information.

Should your circumstances change it will be possible to take cash withdrawals from Stratum, providing the value of units does not drop below the Company's minimum value and all other requirements are met. Any cover guarantee will cease following a cash withdrawal. To ensure that your protection is maintained you should consider contributing additional premiums to your policy if you envisage that you will use this facility in the future. Your money can be paid to you anywhere in the world and in any freely available currency.

You can choose to commence life cover whilst your application is being underwritten. By ticking the Immediate Life Cover box on the application form you could ensure immediate peace of mind for both you and your family.

Further information about Stratum

Policy Reviews
The level of cover for your level of premium is guaranteed for ten years at which time your policy will be reviewed. Reviews will then take place every five years until you reach 70 after which time they will occur annually. Reviews are held to establish whether actual experience of mortality, morbidity, our charges and investment performance have been as predicted at outset. Premium or cover levels may need to be adjusted following a Policy Review. This will ensure that Stratum can provide its guaranteed benefits.

Currency
Stratum can be valued in Sterling, US Dollars, Japanese Yen or Euro's.

Availability
Stratum provides protection cover for individuals between the ages of 18 and 69 at policy commencement. Stratum is not available in the United Kingdom, Hong Kong or the Isle of Man.

Trusts
It may be appropriate to write your Stratum under trust. This will ensure that death benefits pass to whom you wish, without any unnecessary legal delays. Your financial adviser will be able to provide further guidance.

Applying for Stratum
Before you apply, you should satisfy yourself that you are allowed to seek protection under this sort of policy and are not prevented from doing so by any exchange controls or legislation which applies to you. Stratum generally can be owned by individuals who are aged 18 or over, by a company or by trustees. However, it is not available if any applicant lives in certain jurisdictions, such as Hong Kong, the Isle of Man, South Africa, the United Kingdom and the United States and its territories. It is also not available where an applicant is a citizen of the United States and its territories, and is unlikely to be suitable for anyone who has any expectation of becoming resident in the United States and its territories. You should consult your professional financial adviser about your own individual position. Further details about Stratum, including charges, are given in our comprehensive Information Guide.

To apply for Stratum, simply consult your financial adviser and complete the application form. Your adviser will return it to Scottish Provident International. Stratum is available exclusively through professional financial advisers and Scottish Provident International regrets that it is unable to give individual advice. You are strongly advised to consult your professional financial adviser to discuss your own taxation position as Scottish Provident International cannot give personal taxation advice.

Further details

You should be aware that you have an obligation to notify us of any change of address, residence or citizenship because if you become a resident or citizen of some jurisdictions some aspects of your policy may have to be curtailed or modified to maintain compliance with local regulations.

The company is supervised by the Isle of Man Insurance and Pensions Authority. As a Scottish Provident International policyholder, you will receive the world-wide protection of the Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991. The Company reserves the right to adjust the returns from investments to cater for any levy or charge made on the Company under these regulations or similar legislation. Holders of policies issued by the company -,,,rill not be protected by the UK Policyholders Protection Act 1975 if the company should be unable to meet its liabilities to them.

The information contained in this brochure is based on the Company's understanding of Isle of Man legislation and UK Revenue law and practice as at May 2001. While every care has been taken, the Company cannot accept responsibility for its interpretation or any subsequent changes.

The level of cover you will need depends upon your circumstances - your financial adviser will be able to assist you in determining a suitable level of protection. Initially however, you will need to consider what your financial requirements would be following an illness.

How much critical illness cover do I need?

• Cancer
• Heart attack
• Stroke
• Kidney failure
• Aorta surgery
• Coronary artery by-pass
• Heart valve surgery
• Major organ transplant
• Paralysis
• Coma
• Severe burns
• Motor neurone disease
• Loss of sight
• Loss of hearing

How would you support yourself without regular income from working? At the very least, you would still have to deal with all the regular bills such as paying the rent or mortgage, food, electricity and transport.

For most people the cost of their family home is the biggest financial commitment they make during their lifetime. You may wish to insure an amount equivalent to the value of your home, and also take into account the extra cost of possible home improvements designed to make life more comfortable. Alternatively, you may need to move home, for instance from a townhouse to a single storey apartment and you may wish to make provisions for this.

If you were suffering from a serious illness, ideally you would wish to take advantage of the best medical facilities available without worrying about the cost; therefore an amount to cover the cost of private medical care could also be considered.

You may also want to take into account the costs associated with getting better such as spending a short time in a nursing home or employing live-in nursing staff.

Please bear in mind that a complete recovery may take some time and potentially, you may not wish to return to work. Many people build in a little extra cover to take into account irregular bills, such as an annual maintenance charge on your property, to make sure that they are under no pressure to return to work if they do not feel up to it. For some people a change in career to a less stressful job may be required and an allowance for a downward adjustment in earnings may need to be considered.

The need to cover the main breadwinner in the family is an obvious one. It is also important however, to consider the effect a serious illness would have on your partner, even if he or she doesn't work. The obvious cost of employing someone to take care of the household including the care of your children should not be underestimated. A less obvious cost is that you may wish to look after your partner during their illness at a financial cost to yourself.

In addition to these more immediate costs, there are the costs of achieving the long term personal goals that you have been working towards. Goals such as retiring early education expenses for your children or time to spend visiting overseas relatives.

If you want to maintain your lifestyle, or that of your family, through some of the events that life may throw at you, then you need to take action now. After all, you automatically insure your possessions, so don't your life and your lifestyle deserve as much?

The financial consequences

Remember, critical illness cover is not a luxury. It is a layer of financial protection to safeguard your quality of life Sratum a layer of financial protection when it will be needed most

Accident and/or life Cover

• Waiver of Premium option
• automatic Cover Increase option
• Self-Funding option
• Change of Life Assured
• Special Events
  • Marriage
  • Birth or legal adoption
• Immediate Cover
• Protection Cover
  • Standard
  • Maximum
  • Age Basis
• Payment made on diagnosis of a terminal illness or on death
• Immediate Cover Children's Critical Illness Cover Level of Critical Illness can differ from level of Life Cover Protection Cover
  • Standard
  • Maximum
  • Age Basis

Choose one of Stratum's three core protection covers and add extra layers of protection by selecting any optional benefit to ensure that Stratum matches your protection needs exactly.

Why choose Scottish Provident International?
At Scottish Provident International, we are committed to providing a service to you and your financial adviser that is equal to the high quality of our products. As a result, Scottish Provident International has received numerous awards for product innovation, fund performance as well as for customer service.

This service includes regular policy reviews to keep both you and your adviser up to date with the progress of your Stratum policy and also to assist if you need to change any of your benefits.

This document is not authorised for distribution in the United Kingdom, Hong Kong or to citizens or residents of the United States* or its territories.

copyright: Scottish Provident International Life Assurance Limited 2001

* United States territories refers to Puerto Rico, US Virgin Islands, Northern Mariana Islands, Guam, American Samoa, Wake Island and the Trust Territory (a group of islands in the South Pacific including the Marshall Islands).

For further information contact Millennium Offshore Investments