Legal & General is to launch a new protection product to help private sector defined benefit pension schemes meet the increased costs of a member retiring early because of ill health.
The product pays out a cash sum to cover a claim, which can be up to 10 times the employee’s annual salary, and is aimed at DB schemes with at least 100 active members.
An employer with 200 members of staff can expect one ill health early retirement every four years, L&G says.
L&G group protection director Stuart Welch says: ”Legal & General has been successfully running a similar product in the public sector for four years and we now cover more than 100,000 people.
“That experience gives us confidence in our ability to manage this product, price it accurately and we’re sure there’s a demand for it.”