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PTA business increase could hit critical sales

Rising pension term assurance sales could lead to a fall in sales of critical-illness cover, says CWC Research senior partner Clive Waller.

He says most life products sold are term policies with accelerated critical-illness cover but accelerated CI cannot be sold alongside PTA. CI stand-alone insurance is the only CI option available with PTA but Waller says these are complicated and potentially more expensive.

He says the rise in PTA sales could be down to churn rather than new business. But firms such as Bupa and Royal Liver say business volumes on term life cover and critical cover have grown rather than declined.

Waller says: “If you are selling PTA, what are you doing about critical illness? Most CI is accelerated. Stand-alone CI is a different product which makes the sale a lot more complicated and there may be a pricing issue too. I wonder if sales of CI are falling as a result.”

Royal Liver IFA market manager Andy Milburn says: “There is no point in buying PTA if you have then got to buy stand-alone CI. PTA is for customers who can only afford life insurance.”

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