LV= is preparing to add an ill-health “break clause” to its fixed-term annuity later this month in response to similar developments from rival providers.
Just Retirement, MetLife and Primetime Retirement have all launched fixed-term products which allow investors to switch to an enhanced annuity if they become ill during the term of the contract.
Speaking to Money Marketing following publication of the mutual insurer’s 2011 results, LV= managing director of retirement solutions John Perks says: “We are confident that we are leading the market in fixed-term annuities.
“We are looking to further strengthen our proposition in April. We have seen break clauses in the market place and that is something we need to respond to.
“When we make changes to the product they will be made available to existing customers as well.”
LV= recorded a pre-tax operating profit of £29.5m for 2011, reversing a loss of £10.4m in the previous year.
Annuity sales increased 20 per cent, from £44m to £53m, during 2011. Pension sales were up 12 per cent from £41.6m to £46.7m.
Income protection sales increased 34 per cent, from £4.3m in 2010 to £5.8m in 2011, while critical illness sales increased 52 per cent, from £4m to £6.1m, during the same period.