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Widows raises rates for term and reviewable CI

Scottish Widows has raised its rates for term insurance and reviewable critical-illness by an average of 4.5 per cent.

The company says the reason for the increase is that it could not get the reinsurance rates to keep premiums as they were.

The minimum monthly premium for Widows&#39 mortgage and business cover and level term insurance will rise from £4.50 to £6.

The maximum sum assured rises from £1m to £5m less the sum insured of any other Lloyds TSB/ Scottish Widows plans in force.

The new rates will apply to applications made on or after September 8 but the previous rates will be available to pipeline applications for plans starting before October 7.

Applications which are made between September 8 and October 7 will also qualify for the previous rates if the original quotation was made before September 8.

Scottish Widows marketing manager Ross Eas-ton says: “This is our first increase in critical-illness rates since 1998 and the first increase in life cover since 2000.

“We are acutely aware of the need to do the right thing in terms of pipeline business so we are setting out our criteria at the start.”

Lifesearch senior technical manager Kevin Carr says: “The increase goes against the trend for reviewable critical-illness rates to fall while guaranteed rates rise. “It could be a corporate decision to restrict new business to a manageable amount.”

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