IPTM8160 | Insignificant variations

If a variation of a policy does not affect the terms of the policy in any significant respect then it will not affect the qualifying status of the policy for the purposes of ICTA88/SCH15/PARAS17–20. Such variations may be referred to as ‘insignificant variations’.

Examples of insignificant variations are:

• a one-off change in the payment of premiums if it relates only to a change in the frequency of the premiums, including for instance where annual premiums are changed to monthly premiums that, when annualised, are slightly higher to reflect the increased frequency

• a change in ownership of the policy

• a change to the names and addresses on the policy of the policyholder or lives insured, but not changes to the lives insured themselves

• any changes to the premium, sum assured or policy term because of a mis-statement of age on the proposal form

• addition or removal of a critical illness to the list of critical illnesses covered, where the cover on that illness is provided free by the insurer

• a switch between different unit-linked or investment linked funds

• the addition or removal of an option where if the option is exercised the policy is not regarded as having been significantly varied.

With effect from 21 March 2012, a variation may need to be considered for the purposes of the annual premium limit - see IPTM2080.