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&#39CI guarantees will stay but become more expensive&#39

Guaranteed rates will still be available in the critical-illness market in a year&#39s time, according to Lifesearch senior technical adviser Kevin Carr.

Following talks with reinsurers and providers, Carr says he is confident that guarantees will still be available next Christmas.

In Lifesearch&#39s inaugural quarterly protection market report, he warns that there are likely to be more rate changes in the new year, following 42 changes made this year by 16 key providers, but he believes that this volatility will calm down in the first quarter.

The report shows that guaranteed rates are continuing to climb but reviewable rates are getting cheaper and are currently 25 to 30 per cent less than guaranteed rates.

It says the price of life cover is flattening out but that 75 per cent of people who have life cover do not have their policy written in trust, risking potential inheritance tax bills.

Projections for this year suggest there will increases of between 10 and 15 per cent in sales of protection policies, except for income protection which is expected to reach a plateau.

Carr says: “The price gap between reviewable and guaranteed critical illness is widening by the week. Within six months, a reviewable policy could be as much as 50 per cent cheaper than the equivalent guaranteed product.”


Skandia links for distribution bond

Skandia is this month launching a distribution bond giving access to a range of third-party fund links. Investors can build a portfolio by mixing and matching the retail distribution funds of groups including Axa, Prudential, Norwich Union, New Star and DWS. To mark the launch, Skandia is offering 103 per cent allocation until April 6. […]

Providers face fines over baby bonds

Providers could be fined for mismanaging child trust funds. A draft of the Child Trust Fund Bill, included in the Queen&#39s Speech, says a provider which “fraudulently or negligently makes an incorrect statement or declaration in connection with a claim” under sections relating to Inland Revenue contributions and income and capital gains tax could face […]

Investor confidence still rising, says JPMF

Investors are becoming increasingly confident about prospects for the stockmarket, according to JPMorgan Fleming. Its investor confidence index rose to 92 in November from 78 in October, the highest it has been since March 2002. JPMF says twice as many investors are now positive about the stockmarket than are pessimistic. Head of market research Peter […]

Out of context

•”Have I depolarised yet?” Sofa chairman Nick Bamford on the delays over the depolarisation project. •”I&#39ve got a trilby but in the end I decided not to wear it.” – Lansons PR Lisa Stanley dresses down for Money Marketing&#39s Christmas boat party. •”I don&#39t think there is a person here more than half my age.” […]

Guarantees in the retirement income market

Lorna Blyth, Royal London  Do guarantees benefit customers and, if so, when? To answer this conundrum we commissioned Millimans, a global actuarial consulting firm, to conduct an independent review of the UK retirement income market and whether guarantees really do offer customers better value for money. The brief The study was one of the most comprehensive undertaken […]


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