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LTC bond to pay back premiums

PPP Lifetime Care is using the strength of parent company Axa Sun Life to

launch the first of a new generation of investment-linked long-term care

bonds.

The Asset Protection Bond will pay for care if it is needed but also aims

to pay back the investment on the death of the bondholder if a claim has

not been made.

The product has been constructed by linking the Lifetime Care plan from

PPP to Axa Sun Life&#39s flexible bond with additional life cover.

PPP says the product will allow the ltc benefit to be paid as tax-free

income, with the full benefit paid for a valid claim. It has three levels

of cover with a choice over when the benefits are triggered. There is also

a care support service.

The premium is split into two parts with one buying the long-term care

plan and the second buying the flexible bond with life cover.

PPP lifetime care head of retired market development Jacque Langford says:

“It is clear from everything the Government has been saying that long-term

care insurance has an important role to play in funding long-term care.

“Indications are that the Government will only payfor the nursing element

of ltc which means that elderly people with assets will need to consider

protect-ing against the remaining costs of care.

“We believe the issue of asset protection is a fun-damental part of

retirement and inheritance planningand IFAs are beginning to view long-term

care in this context.”

The product pays IFAs commission on both products at 9 per cent of the

premium for the lifetime care plan and 6.25 per cent of the flexible bond

with life cover.

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