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Pru Intl review shuts LTC bond

Prudential International is dropping its long-term care bond in an “ongoing commercial and strategic review of products”.

The plan closes to new business on August 1, remaining open only for investment top-ups. Raising the level of cover will no longer be possible.

The bond was launched under the Scottish Amicable European brand and came under fire in 2000 after Pru told investors it had set growth rates too high and they would have to top up their premiums to maintain cover.

Pru says it axed the product after falling demand. It will focus on developing its offshore presence for IFAs through its unit-linked/portfolio bond and with-profits investment.

Prudential International spokesman Darragh Leeson says: “We have not actively marketed this product for years. We took a decision to withdraw from the market for purely commercial reasons.”

Towry Law product research manager Simon Farrant says: “The players staying in this marketplace say it is expanding but those with investment-based products have waned. The product, while innovative, was over-complicated.”

Nursing Home Fees Agency partner Philip Spires says: “Performance was not enough to meet long-term requirements. More than once, Prudential had to tell customers to contribute more to stay covered.”

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