L&G revamps term and terminal illness cover

L&G revamps term and terminal illness cover

Legal & General has updated its term assurance products and terminal illness cover.

The insurer has increased the maximum expiry age of its term-only products from 80 to 90-years-old, along with extending the maximum policy length to 50 years.

The changes apply to level, mortgage and business protection cover and are effective immediately.

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It has also removed the final 12-month exclusion period from its terminal illness cover, allowing customers to claim following diagnosis at any time while their policy is in place, meaning they will now be covered should they be diagnosed with a terminal illness up to and including the last day of cover.

This enhancement will apply to all products with terminal illness cover included.

Steve Bryan, director of the provider’s intermediary business at Legal & General, said the insurer aimed to be market-leading with many other providers offering lower maximum expiry ages.

Legal & General paid out on 96.9 per cent of terminal illness cover claims in 2014, at a value of £86m.

Mr Bryan said: “The UK has an ageing population and with 60 per cent of projected household growth, over the next two decades being among those aged 65 and over, it is vital that our financial products cater to these changing customer needs.

“With increasing numbers of lenders also changing their mortgage terms, in line with these demographic changes, we need to ensure that borrowers of all ages can protect their homes and loved ones for longer.

“So we will continue to develop and review our products, to help us to pay even more claims and support our customers when they need us most,” he added.

Adviser View

Graeme McColgan, financial planner at Million Plus Financial Planning, called the removal of the final 12-month exclusion period “fantastic”.

He said: “You should never have been penalised for the last year because of the exclusion. It doesn’t make any sense so this is a great move.

“The term move is very positive and in line with people living longer, the mortgage industry seems to be moving towards later in life. For those looking to protect their mortgages, this is a great opportunity.”