Whole of life with care rider
New developments in the market have come from both Vitality and AIG.
Four years ago, VitalityLife launched its lifestyle care cover: a whole of life plan with a separate benefit that, in effect, usually accelerates some or all of the sum insured if the customer needs long-term care.
The plan is available from age 16 to 74 at outset, with a maximum sum insured of £250,000 and a minimum of £10,000. There is also the option to protect the life cover element.
This was followed by a similar product from AIG Life. Customers aged between 17 and 84 can buy up to £400,000 of AIG care cover with whole of life.
It pays out 75 per cent of the insured sum if the customer needs lifelong care or 100 per cent when they die.
Both products are designed to protect the assets of those no longer able to live independently or who wish to leave a financial legacy to loved ones when they die.
“Financial advisers need to be honest and have that difficult conversation with clients about whether they’ve considered how they’ll pay for lifelong care if they need it,” says AIG’s Ms Plews.
“There is no silver bullet solution to suit all the needs of every person who might one day need to pay lifelong care fees.
"Anyone who wants to plan ahead should look at whether it would be better for them to buy insurance that contributes towards care costs or instead make the most of the assets they already have, such as their homes or pensions.”
Over 50s plans
Over 50s life insurance plans are typically taken out between the ages of 50 and 80, and usually pay a relatively small lump sum to help with financial commitments, such as funeral costs and outstanding bills.
Mr Lakey explains that with guaranteed over 50s plans their value depends on the client and their health.
“The attraction is no medical underwriting, but the price for that is a far higher monthly premium and the knowledge that death within 12 to 24 months will only result in a return of premiums,” he says.
“If health is not an issue then an underwritten plan offers better value.”
Ian Sawyer, managing director of Assured Futures, adds: “Over 50s guaranteed acceptance cover is much maligned by national press and industry purists.
"However, the buying public still find comfort in the simplicity and reliability of this type of cover. And I believe it will continue to have a growing place in the market, which is backed up by the growing sales numbers reported in Swiss Re Term Watch.”
