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Exceptional risk of death or disability

Life assurance premium relief is abolished in respect of all policies with effect from, broadly, 6 April 2015 (see E1.1300).

In determining whether policies qualify for premium relief there is to be disregarded the portion of the premiums charged for an exceptional risk of death or disability, and any provision for the same reason whereby a sum may be chargeable as a debt against the capital sum guaranteed on death. Before FA 2003, these policies were described as providing cover for exceptional mortality risk. That phrase was replaced by the words 'exceptional risk of death or disability' with the latter wording being deemed to have always had effect¹. This change was designed to prevent qualifying status being lost if the insurer removed either a charge on policy proceeds or a previous loading because the insured person had an exceptional risk of suffering disability or critical illness.

Connected policies

Where one policy depends upon another, neither policy qualifies unless they would qualify if taken together².