Life assurance and long term care options are to be added to Skandia Life's rolling term critical i...
Life assurance and long term care options are to be added to Skandia Life's rolling term critical illness product, Skandia Protect, in a bid to create comprehensive menu-based protection under a single plan.
Life cover is also available on a standalone basis either on a rolling term, fixed term or whole of life.
The rolling term approach guarantees a premium for 10 years. The policyholder has the option to renew the cover for a further 10 years when a new premium will be quoted without further underwriting. This latest move extends the concept to include life cover with the option of converting the plan to long term care insurance (LTCI) without an extra charge.
Cover has to be converted to LTCI before the policyholder is 65 and claims are based on the failure of three activities of daily living (ADLs) or mental impairment. Benefit is paid out as a monthly income of 2% of the sum assured over 50 months.
According to Lynda Cox, senior marketing manager at Skandia Life, the new additions should help to increase the uptake of LTCI and provide older clients on fixed incomes with the reassurance of a guaranteed premium for life cover.
She said: 'The LTC option should encourage people to think about planning for LTC and will hopefully act as a trump card that IFAs can keep in case clients are not interested in traditional LTCI policies. It also gives IFAs the opportunity to discuss LTCI in general, which has to be positive. Cover is cheaper than a normal LTC policy as it is based on life cover. When the client switches over, nothing changes.
'We have been talking to IFAs and have had a really positive response on the LTCI conversion, especially as it is free of charge. The WOL addition has been welcomed as it guarantees a set premium for life. In the past, older people on fixed incomes have had to opt for a flexible life policy where the premium varies, but the premium is fixed, meaning customers know exactly how much they need to pay out.'
Uptake of the Skandia Protect product, launched in January this year, has exceeded projections by 20%. The average sum assured for critical illness with life cover has also proved successful, standing at £186,000, compared with the industry average of £69,000.
