Escalation Customer Mailing 

In view of the low or negative rate of inflation in recent months, we have written to all of our Planholders who have the Inflation Protection (Escalation) Option within their Plan.

We have tried to cover the most likely questions below but if you have any others please email us at ifaoperations@royal-liver.com or phone us on 0845 675 3555.

Questions and answers for Planholders with the Inflation Protection (Escalation) Option:

I have received your letter regarding my option. Do I need to do anything?

• No, the letter is purely for information, although you should keep it with the rest of your Plan documents in case you need to refer to it in the future.

How do I know if I have an Inflation Protected Plan?

• It will be stated on your Plan Schedule as "Inflation Protected", and you will receive a letter about the option each year, shortly before your Plan anniversary date.

I have just received a letter from you with the option to increase my cover by a small amount and with a small premium increase. Why are the increases so low this time?

• The increase in your cover is based on the increase in RPI. In some months this has been unusually low compared to previous years. For example, in February 2009, the increase in RPI over 12 months was 0.1%. During months when the RPI is low, the increase in cover we offer will also be low.

If RPI is negative for the last 12 months. Will you reduce my cover as a result?

• No. If RPI is negative we will freeze your level of cover and premium for 12 months. If RPI increases over the next 12 months, we will then offer the option to increase your cover in line with the increase in RPI at your next Plan anniversary.

I have a claim in payment and receive a monthly payment from you which is linked to RPI each year. If RPI is negative, will you reduce my payments?

• No. If RPI is negative we apply a minimum of zero. This means we will not reduce the monthly payments we are making to you. Your payments will remain the same until the RPI increases to a value above the RPI level which your payment is based on.

If RPI increases above zero, can I increase my cover under the option then?

• No, the option to increase only applies at the Plan anniversary date, so you will need to wait until the next anniversary.

How will I know when RPI becomes positive so the option applies again?

• We will write to you each year whatever has happened to RPI, telling you whether or not the option applies, so you will always know when you can exercise the option.