Pegasus set to strengthen WOL buyback option

Pegasus has announced a series of improvements to the buyback option on its whole of life product, writes Rachel Williams.

The changes are set to come into force on 1 August, when parent company Abbey National officially acquires Scottish Provident, and the two protection players' ranges merge.

Currently only offering critical illness buyback, Pegasus is now set to offer life cover buyback to better meet the needs of clients with accelerated life and critical illness whole of life plans.

Nick Kirwan, manager of product development at Pegasus, said: 'If you have critical illness buyback but have a combined life and critical illness product, we will now offer life buyback as part of that option.'

He added: 'We are also increasing benefits on buyback to 50% of the sum assured with a maximum of £50,000, up from 35% with a maximum of £35,000.'

Other improvements will include an extension of the buyback term from five to 10 years. Child cover will also be included in the new buyback option, which will continue during the gap year between the original policy lapsing and the start of the buyback cover.

However, Kirwan said the insurer would not be consider- ing changes to the charging structure, which ensures buy- back remains affordable for claimants that may no longer be earning.He said: 'We charge an additional premium at the start so the premium at point of need can stay at £25 a year, regardless of age and health.'

According to Kirwan, the buyback option, which was introduced back in 1998, is now included on a third of all plans.

Scottish Provident is also improving the income protection benefit on its self-assurance range. The changes, which are also timed to coincide with its acquisition, include the addition of four and 52-week deferred periods and an increase in maximum benefits to £75,000 a year.

Court of session approval for the demutualisation of Scottish Provident and transfer to Abbey National was granted in mid-July.