Zurich has frozen the launch of its pension term assurance product until there is more clarification from the Treasury but the company is hoping it will still be able to launch an adapted PTA product.
It shelved the launch after the pre-Budget Report move which saw the likely withdrawal of tax relief on stand-alone PTA policies. The new product was due to come out mid-January.
But Zurich Financial Services protection development manager Gerry Warner says he hopes the Treasury decides to keep stand-alone PTA but impose a tax cap on it as a compromise. At the least, Warner hopes the Treasury will agree to allow PTA to still be sold if it is linked to a pension but without too many restrictions or complicated rules.
He says that, depending on the outcome of the Treasury’s consultations with the Association of British Insurers, Zurich will decide if it can adapt its PTA product to suit the new rules.
Warner says: “If PTA stays and there are too many restrictions, then it may just wither on the vine. If it is linked to a pension, then will the Treasury insist that you take out your life insurance with the same provider that you have your pension with?
“And if the customer was to stop contributing to their pension at any point, would they have to stop paying their premiums as well?”
But Royal Liver IFA market manager Andy Milburn says: “We are not going to get stand-alone PTA back.”