1. Posts in the subject areas are now being moderated. Please do not post any details about your exam for at least 3 working days. You may not see your post appear for a day or two. See the 'Forum help' thread entitled 'Using forums during exam period' for further information. Wishing you the best of luck with your exams.
    Dismiss Notice

Unit-linked LTCI

Discussion in 'SP1' started by Jian_901, Aug 25, 2018.

  1. Jian_901

    Jian_901 Member

    Hi all,

    I would like to start a thread on the benefit under an Unit-linked LTCI product.

    I understand that before the commencement of a claim, the unit-fund will have the following charges deducted on a regular basis:

    • Buy/sell spread (e.g. 5%)
    • Risk charges (e.g. for funding the insurance risk/cost of care)
    These deductions are subsequently added to the non-unit fund.

    I would like to clarify as to whether the non-unit fund has a guarantee that the risk charges deducted will cover the life-time cost of care, or is there a point of fund exhaustion i.e. the policyholder will be left without cover after the non-unit fund is exhausted?

    If either approach is workable, which one is the most common in practice?

    Thanks for your help,
    Jian
     
    Jian_901, Aug 25, 2018
    #1
  2. Mark Willder

    Mark Willder ActEd Tutor Staff Member

    Hi Jian

    Either approach that you describe is possible in theory. However, no such contract is currently on sale in the UK (sales of pre-funded LTCI had been very low in the UK, so the insurers have now all pulled out of the market).

    If any students are aware of pre-funded LTCI contracts currently on sale then it would be interesting to hear how they work.

    Best wishes

    Mark
     
    Mark Willder, Sep 17, 2018
    #2

Share This Page