Investment classification for over 70s may cause confusion
Term assurance for people aged over 70 will continue to be classed as an investment product under the Financial Services Authority's (FSA) new rules, despite all other term assurance being classed as general insurance.
Guests at COVER's Think Tank debate on regulation disagreed with the FSA's decision to keep term assurance that runs past clients' 70th birthdays as an investment product. As more people work past retirement age and have longer mortgage terms, it is likely more clients will demand longer terms on protection.
Speaking at the debate, Nick Kirwan, head of protection at Scottish Provident, said: "Advisers could find themselves in a position - if they offer an increased term - where they are suddenly using the wrong sales process with the wrong literature and it may even be with the wrong authorised principal if you have more than one. It's an absolute piece of nonsense."
Term assurance that insures past age 70 will be regulated with other investment products from 31 October 2004.
