Insurers have been addressing two important areas: making it easier to claim and increasing consumer understanding.
This is good news for advisers who struggle to engage their clients on the need for protection, especially those who are cynical about policies paying out when needed.
Payout rates for life claims are over 98% across the market with critical illness and income protection in excess of 90% – emphasis on improving the likelihood of a claim being paid goes some way to hopefully showing clients these policies do pay out and do offer value.
For new homeowners with children, parents are now able to purchase extra cover for their children as part of Legal & General’s children’s critical illness cover extra.
Under this policy, Legal & General will pay 50% of the amount of the policyholder’s cover, or up to £25,000, for a valid children’s claim.
Children will be covered from birth until the age of 22 and there is no limit to the number of children a parent can claim for.
It also includes a new children’s terminal illness benefit of £10,000 if the child is diagnosed with an advanced or rapidly progressing incurable condition with a life expectancy of less than 12 months.
Advisers with clients worried about cancer will find VitalityLife’s cancer relapse benefit an interesting proposition.
And VitalityLife has added seven new illnesses to its serious illness policies to cover 145 conditions under primary cover and 178 under comprehensive cover.
The latter already covers a wide range of conditions but going forward it will also automatically include VitalityLife’s unique cancer relapse benefit.
This pays out on all subsequent cancer claims but also boosts the payout by 50%.
This should help to simplify comprehensive cover and means customers will be financially protected against the recurrence of cancer at no additional cost.
Meanwhile, Royal London has launched a serious illness benefit for its direct-to-consumer offering.
In effect, it is a simplified critical illness cover policy for people buying cover without financial advice.
The benefit is available to customers taking out a Royal London life insurance policy directly, offering a lump sum payment of up to £350,000 if the customer is diagnosed with one of six conditions: cancer, heart attack, stroke, multiple sclerosis, benign brain tumour or dementia.
On a similar theme British Friendly has been trialling ‘immediate support payment’ for claims received on income protection policies that have been in force for at least three months.
British Friendly will commence payment of the weekly benefit amount at the end of the deferred period, whether the supporting medical evidence has been received or not.
The maximum amount payable is £500 and will be ‘on account’. This should reduce the claim burden for customers and improve the ease and speed of the claims process.