The Flexible Protection Bond, which a Pru International spokesman said is believed to be unusual if not unique "particularly in the offshore space", is a single premium bond offering whole of life cover with a range of investment choices and intended to be sold by advisers.
Prudential said the decision to cut the cost of the product’s premiums followed a strategic review, and was made possible by leveraging at the reassurance level that enabled the premiums to be reduced to a more market-friendly level.
"It is a product that we have had for a long time, but for a whole host of reasons, including the fact that until now it was quite expensive to buy the life cover, we have not really made the most of it" until now, said Prudential investment business development manager Paul Fidell.
Now that the premiums have been brought down, however, Fidell said the FPB has potential uses "in a number of different areas", including IHT planning, where it could be used in conjunction with the UK Treasury’s proposed reduction in IHT where 10% or more of an estate is gifted to charity.
"This would give [an individual] a more efficient way of making a charitable legacy" under the Treasury’s propsed system, which is outlined in a consultation document currently under review. If the planned changes are adopted, they will apply to the estates of individuals who die on or after 6 April 2012.
"We expect this announcement [of the reduced premiums on the FPB] to drive a lot more enquiries from this point forward,” Fidell added.
Other tweaks
In addition to reducing the premiums on the Flexible Protection Bond, Prudential International said it had also made improvements to the underwriting processes and introduced dedicated monitoring for large cases as well as a new contact strategy, in an effort to ensure advisers know how their clients’ cases are progressing.
Features of the Flexible Protection Bond include a choice of investment funds, non-medical increase options and a choice of single or joint-life cover.
More details can be found on www.pruadviser.co.uk/international .
| New premium | Old premium | Reduction | |
| Male, 50, non-smoker | £29,398 | £43,128 | -31.84% |
| Male, 60, non-smoker | £52,720 | £71,772 | -26.55% |
| Male, 70, non-smoker | £90,208 | £109,566 | -17.67% |
| Female, 50, non-smoker | £24,838 | £33,059 | -24.87% |
| Female, 60, non-smoker | £44,839 | £56,343 | -20.42% |
| Female, 70, non-smoker | £77,679 | £90,518 | -14.18% |
