PruProtect is set to launch a new whole of life protection product designed to help people pay for long-term care, Money Marketing understands.
The product will enable customers to take out a whole of life policy with an option to pay an additional premium that will pay a selected amount worth between 10 and 100 per cent of the sum assured at the point of needing care.
In the event of mental impairment or failure of two or more activities in daily living, the pre-selected percentage of the sum assured will be paid out.
The policyholder would then be free to use the funds to help pay for the cost of their care.
Ageas UK is also understood to be considering launching a similar product.
Whole of life LTC products are currently offered in the US but no such plans are available in the UK. A source says PruProtect will look to roll out its own version in November.
London & Country sales director Michael Aldridge says: “This sounds like a really good proposition, and could mark a bit of a rebirth for whole of life products. Increasingly they have been used for funeral costs, which is sensible, but to help pay down the costs of long-term care is a really great development.
“Traditionally whole of life was an inheritance tax-planning product, though often it could work out more cost-effective to take out a simple term assurance product if it wasn’t being purchased for IHT purposes. This development could be a real game-changer for whole of life.”
PruProtect declined to comment while Ageas UK was unavailable for comment.