Industry
Skandia has withdrawn from the pre-funded long term care (LTC) market following weeks of speculation over its future in the sector. Customers with an existing Skandia LTC policy are unaffected by the closure.
Despite the opportunities that should exist in the market, the provider revealed that one of the reasons behind its decision was the considerable uncertainty and confusion surrounding the product.
The market has been in disarray for some time following a flurry of providers withdrawing from the market since the end of 2003. Currently, Skandia is the only provider accepting new business. However, it has announced the last date for all new business quotations will be 31 August 2004. All new applications, which must be submitted with a valid quotation, must be received at the head office by 30 September 2004.
Skandia's quotation disks will also be withdrawn on 31 August 2004. This will affect quotes for life and critical illness cover as well as LTC.
"As an industry, we have been trying to make a success of the pre-funded long term care market for 10 years. While the market is too big to ignore in terms of size and demographics, pre-funded long term care is not the way to address this," said Shelley Robertson, protection brand manager at Skandia.
Further changes to Skandia's LTC products include its conversion option on its rolling term and fixed term life cover policies. These will continue to be available but will be renamed on 1 October 2004. Despite this blow to the pre-funded LTC sector, Skandia remains committed to the LTC market. "We are looking at an alternative model unlike anything else currently in the market," Robertson said.
