The addition of joint life last death rates, where the lump sum is paid upon the death of the second policy holder, means that the Rolling Term plan can be used more widely as an estate planning tool for couples who anticipate an inheritance tax (IHT) bill on their estate.
Skandia Rolling Term differs from other renewable plans in that there is no maximum expiry age for the cover. It allows customers to continue the cover every ten years with no further medical evidence and the premiums increase at each renewal based on their ages.
The plan provides a flexible alternative to the traditional guaranteed premium Whole of Life cover, as during the early years the costs will often be significantly lower. It can also be used as a replacement to unit-linked Whole of Life plans, many of which have been withdrawn from the market since the introduction of the RDR.
The graph and table below illustrate the early cost saving that a Rolling Term product can offer. In this example, premiums for Rolling Term are considerably cheaper in the early years, with the total premiums paid only exceeding a similar Whole of Life plan at around the life expectancy age.
Quotes are now available from Skandia and the major external portals – Avelo (Iress), Assureweb (iPipeline) and Webline.
Ian Jefferies, head of protection at Skandia comments:
“With the nil rate band now frozen for several years, estate planning is becoming an issue for many more customers. Since its launch in 2001 our Rolling Term product has been very popular as a flexible and often lower cost alternative to the traditional Whole of Life product. The introduction of joint life last death rates further enhances the suitability of the plan to a wider range of customers with sizeable estates.”