This document provides details for a policy providing Fixed Term Life Cover or Mortgage Life Cover with Critical Illness Benefit. Taken together with your insurance schedule and any endorsement(s) it forms the terms of the contract between us, Direct Line Life Insurance Company Ltd, and you, our customer. The information contained in the proposal form and in any other supplementary proposals signed by you forms the basis of the contract.

We will provide cover as shown in the insurance schedule during the period of insurance on the terms set out in this document in return for the payment of the premiums as set out in the insurance schedule.

Payment of the claims made under this cover depend upon it being proved to the Company's satisfaction that:

i.) the date of birth of the life insured is as shown in the insurance schedule;

ii.) during the period of insurance, which cannot be beyond the age of 70, the life insured suffers an insured event;

iii.) the insurance schedule shows that cover has been taken out with us for that event;

iv.) the claimant is legally entitled to the policy proceeds;

v.) best endeavours have been made to ensure that statements made in support of the proposal for insurance are complete and correct and that all other factors which may be material in respect of the cover given have been disclosed; and

vi.) the policy is still in force.

The words 'he', 'him', and 'his' should read 'she', 'her', and 'hers' where appropriate. The words 'life insured' should read 'lives insured' where appropriate.

Fixed Term Life Cover is designed to provide a fixed lump sum if the life insured should die during the period of insurance.

We will pay the sum insured on the death of the life insured within the period of insurance. (But see instead the section headed Optional Benefits if there are two lives insured).

Fixed Term Life Cover has no cash-in value nor is there any return at the end of the period of insurance.

Once a policy has been set up the level of cover cannot be changed.

We will pay interest on any money payable for Fixed Term Life Cover following the death of the life insured if we are not able to establish to our satisfaction evidence of the insured event and ownership of the policy proceeds within a two month period from the date of the notification of the claim. Interest will be payable from the date of notification of the claim at a rate of 2% p.a. below the base rate as quoted by The Royal Bank of Scotland plc. Any such interest payment will be subject to income tax as appropriate.

Mortgage Life Cover is designed to pay, on death of the life insured during the period of insurance, the sum insured as defined in the insurance schedule based on the date of death. (But see instead the section headed Optional Benefits if there are two lives insured).

The cover should provide a sum sufficient to pay off the outstanding balance of your mortgage if the life insured dies during the period of insurance as long as:

a) the mortgage interest rate for the period covered does not exceed 12% a year; and

b) the original sum insured and the policy term equalled the original mortgage and mortgage term, neither have subsequently been altered; and

c) the mortgage payments are up to date at the time of death.

Mortgage Life Cover has no cash-in value nor is there any return at the end of the period of insurance.

Once a policy has been set up, the level of cover or the period of cover, cannot be changed.

We will pay interest on any money payable for Mortgage Life Cover following the death of the life insured if we are not able to establish to our satisfaction evidence of the insured event and ownership of the policy proceeds within a two month period from the notification of the claim. Interest will be payable from the date of notification of the claim at a rate of 2% p.a. below the base rate as quoted by The Royal Bank of Scotland plc. Any such interest payment will be subject to income tax as appropriate.

On proof to the company's satisfaction that the life insured is suffering from a critical illness, we will bring forward the payment of the sum insured.

For joint lives, first death policies the payment will be brought forward on proof to the Company's satisfaction that one of the lives insured has been diagnosed as suffering from a critical illness.

No benefit will be payable on any subsequent occurrence of a critical illness.

No death benefit will be payable if a claim has been paid on occurrence of a critical illness.

This section gives full details of the illnesses covered and their formal definitions, and are the only illnesses covered by this policy.

Where the Association of British Insurers has critical illness definitions within their Statement of Best Practice, we have used them.

A global impairment of brain function such that permanent supervision or assistance by a third party is required. The diagnosis must be made by an appropriate consultant who should be satisfied that there is no other discernible cause.

The undergoing of any interventional technique, on the advice of a consultant cardiologist involving the use of transluminal coronary catheters to correct significant stenosis at least 50% diameter narrowing of two or more coronary arteries as part of a single procedure. Angiographic evidence to support the necessity for the above operation will be required.

Undergoing surgery for disease of the aorta needing excision and surgical replacement of a portion of the diseased aorta with a graft. For this definition, aorta means the thoracic and abdominal aorta but not its branches.

The actual insertion on the advice of a consultant cardiologist of a balloon catheter through the orifice of one of the valves of the heart and the inflation of the balloon to relieve valvular abnormalites.

A non-malignant tumour in the brain, resulting in permanent deficit to the neurological system. Tumours or lesions in the pituitary gland are not covered.

Total permanent and irreversible loss of all sight in both eyes.

Any malignant tumour characterised by the uncontrolled growth and spread of malignant cells and invasion of tissue. The term cancer includes leukaemia and Hodgkins's disease - but the following are excluded:

• All tumours which are histologically described as pre-malignant, as non-invasive or as cancer in situ

• All tumours of the prostate unless histologically classified as having a Gleason score greater than 6 or having progressed to at least TNM classification T2N0m0.

• All forms of lymphoma in the presence of any Human Immunodeficiency Virus.

• Kaposi's sarcoma in the presence of any Human Immunodeficiency Virus.

• Any skin cancer other than invasive malignant melanoma.

A state of unconsciousness with no reaction to external stimuli or internal needs, persisting continuously with the use of life support systems for a period of at least 96 hours and resulting in permanent neurological deficit. Coma secondary to alcohol or drug misuse is not covered.

The undergoing of open heart surgery on the advice of a consultant cardiologist to correct narrowing or blockage of one or more coronary arteries with by-pass grafts but excluding angioplasty, laser relief or any other procedures.

Total permanent and irreversible loss of all hearing in both ears.

Undergoing open-heart surgery from medical necessity to replace or repair one or more heart valves.

Benefits will be payable to medical and other personnel, upon the diagnosis of HIV infection provided that such infection was considered by the medical authorities involved to be caused by a needlestick/sharp injury or by mucous membrane exposure to blood or bloodstained body fluid which occurred during the 12 months preceding diagnosis and during the currency of the policy. The accident must have occurred whilst the insured was following his normal occupational duties and reported in accordance with the established occupational procedures for such accidents. The life insured must, within five days of the accident, have undergone a blood test indicating the absence of HIV or its antibodies but a further blood test performed within 12 months of the accident must indicate the presence of HIV or its antibodies.

Infection by any Human Immuno Deficiency Virus provided that the Company, on the advice of its Chief Medical Officer, is satisfied that the infection was due to a blood transfusion given as part of medical treatment after the commencement of the policy.

End stage renal failure presenting as chronic irreversible failure of both kidneys to function, as a result of which either regular renal dialysis or renal transplant is initiated.

The permanent physical severance of two or more limbs from above the wrist or ankle joint.

Total permanent and irreversible loss of the ability to speak as a result of physical injury or disease.

Accidental injury to the head resulting in residual brain damage. There must be permanent neurological deficit causing significant functional impairment as defined by a consultant neurologist using standard measures of head injury (for example, the insured must score 5 or less on the Eight Point Glasgow Outcome Scale for Head Injuries).

The actual undergoing as a recipient of, or inclusion on an official UK waiting list, for a transplant of a heart, liver, pancreas or bone marrow.

Confirmation by a consultant neurologist of a definite diagnosis of Motor Neurone Disease.

The undergoing of open heart surgery, on the advice of a consultant cardiologist, to correct valvular and structural abnormalities.

Total irreversible loss of muscle function or sensation to the whole of any two limbs as a result of injury or disease. The disability must be permanent and supported by appropriate neurological evidence.

Confirmation by a consultant neurologist of a definite diagnosis of Parkinson's Disease. Parkinson's Disease secondary to alcohol or drug misuse is not covered.

The actual undergoing of surgery on the advice of a consultant cardiothoracic surgeon for a disease of the pulmonary artery to excise and replace the diseased pulmonary artery with a graft.

A cerebrovascular incident resulting in permanent neurological damage. Transient Ischaemic Attacks are specifically excluded.

Third degree burns covering at least 20% of the body surface area.

A permanent inability to perform independently, three or more of the activities of daily work as detailed below, with or without the use of mechanical equipment, special devices or other aids. Confirmation must be received by a consultant physician and be supported by the Company's Chief Medical Officer.

Bending - You are unable to bend or kneel as if to pick up a weight of 1kg from the floor, and straighten up again without the assistance from another person.

Walking - You cannot walk a distance of more than 200 metres on flat ground without stopping.

Climbing - You cannot walk up and down a flight of 12 stairs with the use of the handrail within 90 seconds.

Rising from sitting - You are unable to rise from sitting in a dining table chair (with arms) to standing, using the arms of the chair if necessary, without assistance from another person.

Standing - You are unable to stand, with the aid of a walking stick if necessary, for more than 10 minutes before needing to sit.

Manual dexterity - Lack of physical ability to use a pen, pencil or keyboard with either hand (i.e either left or right) or any artificial aid.

Lifting and carrying -You cannot pick up from table height and carry for 5 metres a 2kg weight with either hand. Either hand means both hands have to fail the test separately in order to satisfy this activity.

On proof to the company's satisfaction that the life insured is diagnosed as suffering from a terminal illness we will bring forward the payment of the sum insured.

The definition of terminal illness is set out in the 'meaning of words' section at the end of this document.

For joint lives first death policies the payment will be brought forward on proof to the Company's satisfaction that one of the lives insured is suffering from a terminal illness.

No benefit will be payable on any subsequent occurrence.

No death benefit will be payable, if a claim has been paid upon diagnosis of a terminal illness.

Where it is indicated in the insurance schedule that you have chosen the optional benefit described below, the following will apply, as appropriate. This option may be selected only at the time of taking out the policy.

We, will pay the sum insured on the first death or first diagnosis of a terminal illness or a critical illness to occur on either of the two lives insured named in the insurance schedule.

We will provide cover as described in this document and the insurance schedule provided that:

a) the statements made and the information given to us by phone and in the proposal form, supplementary proposals and declarations which form part of the contract, are complete and correct to the best of your knowledge and belief; and

b) the statements made and the information given to us by phone or otherwise in connection with any claim are complete and correct to the best of your knowledge and belief; and

c) you have not withheld any information that may materially affect our providing cover; and

d) all conditions, limits and endorsements applying to the cover have been complied with.

Failure to comply with any of these conditions means we will not pay claims and you will not be entitled to any refund of premium and no payment will be due to you.

As part of our Random Sampling policy, the life insured may be required during the first 6 months of inception of the policy, to have a medical examination and/or to authorise us to apply to your doctor to have access to your medical records for confirmation of the information you have supplied. If you are selected we will contact you and inform you of the necessary arrangements.

We will allow 31 days of grace for the payment of premiums. If the life insured suffers an insured event during the days of grace any outstanding premiums will be deducted from any benefit payment.

If an outstanding premium is not paid before the expiry of the 31 days grace the policy will be cancelled and the cover will cease on the date 31 days after the date on which the premium was due as specified in the insurance schedule.

Monthly premiums must be paid to us by direct debit through a bank or building society.

If cover ceases for whatever reason during the term of the policy, it may be reinstated subject to such conditions as the Company may in its absolute discretion decide.

A maximum of one claim under each policy will be paid. You or your legal representative will be required to confirm the details of any claim by completing a claim form. The Company may request such information, including evidence of death, evidence of terminal illness, evidence of critical illness, evidence of age and all documents establishing ownership of the policy proceeds, as we deem necessary.

If a critical illness or terminal illness claim is not accepted because the definition is not satisfied, this would not prejudice any subsequent death claim. However no benefit will be paid where as a result of the Company not receiving the information requested, the Company is unable to establish satisfactory evidence of death, critical illness, terminal illness, age of life insured or ownership of claim proceeds.

In addition no benefits will be paid if the Company establishes satisfactory evidence that statements made in support of the proposal for insurance were not complete and correct to the best of your and the life insured's knowledge and belief, or that any material information was withheld.

If the policy is cancelled by you no payment will be made by the Company and the policy will cease.

The Company reserves the right to alter the policy as the Company reasonably considers appropriate if the policy or the Company are affected by a change in legislation or taxation or any judicial decision. The Company will give you written notice of any such alteration.

Once your policy is in force the amount of cover and policy term cannot be changed.

The company reserves the right to amend the premium payable during the policy term. These reviews will be carried out taking into consideration our claims experience, developments in medical technology and diagnosis and related expenses. You will be notified in writing 3 months before any change is introduced and your direct debit will be amended accordingly.

Any other misrepresentation of, or failure to disclose, material facts in any document signed by you or the life insured which entitle the Company to alter, amend or cancel the policy having regard to the true facts. A material fact is any information which could influence the Company in the assessment of any proposal. If we cancel the policy you will not be entitled to any refund of premium and no payment will be due to you.

Any notice of assignment, or assignation in Scotland, should be sent direct to the company's Administration Department at:

Direct Line Life Insurance Company Limited, 14-18 Cadogan Street, Glasgow, G2 6QN.

Only at this address will notices of assignment of assignation be received and recorded.

All premiums and all payments by the Company are payable in sterling or any currency applicable at that time, at the Company's head office.

The policy covered in this document is governed by and subject to English Law.

For the purposes of the Contracts (Rights of Third Parties) Act 1999, the Customer and the Company agree that there is no intention to confer contractual rights on any third party who may benefit under the terms of policy.

Where appropriate, words in the masculine include the feminine and words in the singular include the plural and vica versa.

One of the following:

i) Death of the life insured; or

ii) Confirmation that the life insured has been diagnosed as suffering from a terminal illness; or

iii) Confirmation that the life insured has been diagnosed as suffering from a critical illness.