Bupa, Bright Grey and Scottish Provident are introducing conversion options on their pension term assurance plans which enable policyholders to switch to ordinary life cover with no additional underwriting.
The three were among the firms listed by Money Marketing recently which said they would cancel a customer’s policy without offering the option to switch to an ordinary term product if the client became ineligible for tax relief.
In September, MM reported on research by Hargreaves Lansdown which found that Bright Grey, Bupa, Norwich Union, Scottish Provident and Standard Life would cancel customers’ policies if they moved abroad for more than five years, leaving them without life cover.
The option is being introduced retrospectively to all policyholders and the companies say it has been introduced as a direct response to demand from advisers.
The option is available to Bright Grey and Bupa policyholders approaching the pension lifetime limit as well as people who become ineligible to claim tax relief.
Scottish Provident is working on a conversion option and expects it to be introduced in the second half of 2007.
Liverpool Victoria recently changed its policy terms for all existing and future clients to allow them to switch to gross premiums in these circumstances.
Standard Life spokesman Paul Keeble says: “We already offer the option to switch to a level term product with gross premiums if the customer is rapidly approaching the lifetime limit and we are looking into the possibility of introducing a switch option if the customer becomes ineligible for tax relief.”
Norwich Union spokesman Rob Pell says: “We currently only offer a switch option for customers who exceed their lifetime limit.”
Bright Grey distribution director Andy Peters says: “We have seen a lot of interest in Bright Grey’s PTA plan and are pleased to be adding the conversion option.”