A Financial Conduct Authority investigation found that 530,000 widows may have been left without an income because their husbands were not told payments from their single life annuity would cease on their death.
From April there will no longer be a compulsion to buy annuities and therefore an increased demand to provide a cash lump sum in addition to the income drawdown.
Neil McCarthy, sales and marketing director at LifeQuote, said: “When people choose drawdown as opposed to an annuity post April 6th changes, there could be an increased demand in protection policies.”
“This could happen as people look to alternative ways to ensure the surviving partner has a guaranteed lump sum to possibly provide a new source of funds for an income, or to pay for critical purchases such as funerals on their death in addition to what is likely to be an unknown rolled over pension fund,” he added.
