Here are the key moves this year that intermediaries need to know about when advising clients on the best way to protect themselves and their families.
The first alteration came at the end of January when Scottish Widows introduced a new series of protection plans called named Plan and Protect. Available only via Halifax and Bank of Scotland branches, these plans have been designed around the simplicity concept, which has resulted in an eleven page brochure that compares favourably with the fifty plus page documents issued by many other companies. Being designed for branch use it comes with just seven health questions and possibly points the way towards future intermediated plans.
The first change that affected advisers came in March from Canada Life. It added eleven additional 100 per cent payment conditions plus twelve additional payment conditions including a range of early-stage cancers. Additionally, five existing 100 per cent conditions and six existing additional payment conditions received improved claim wordings. Unlike some insurers, Canada Life has ensured that all adult conditions are included within the children’s cover, a concept so simple that it bemuses me as to why other insurers fall at this hurdle.
June saw LV= make two minor improvements as well as one retrograde step. The improvements related to both of the Third Degree Burns conditions. The 100 per cent condition has reduced the requirement from 50 per cent of the body to 20 per cent. The additional payment conditions saw the face/head burn requirement fall from 20 per cent to 10 per cent.
The more important change relates to Benign Brain Tumour. For a number of years LV= has led the market by paying claims merely on diagnosis, it has now joined the majority that require some form of treatment – surgery, radiotherapy or chemotherapy. Naturally this reduces the claim potential.
Mid-July found Aviva making two adjustments. The first was to remove loss of speech as a named condition. Their reasoning was entirely logical as they had never paid a single claim due to it being primarily caused by cancer or a stroke, meaning it is already covered.
The second change was to simplify the Extra Cover option. Previously it comprised four component parts and this has been stratified into three sections making it easier to understand and explain.
Legal & General
For many years Legal & General has been market leader in terms of sales yet the recent market move towards quality has seen it under pressure. During late July L&G responded with substantial improvements to its two plans – standard and CI Extra.
Numerous new 100 per cent payment conditions have been added, as have eight additional payment conditions. Encouragingly it also began rationalising condition numbers by incorporating similar or linked conditions under a single heading.
Moreover, unnecessary condition wording has been removed. This trend will appeal to both advisers and clients as it reduces complexity.
Additionally, within the CI Extra plan, L&G has increased both the additional payment conditions and the children’s cover to the lower of £30,000 or 50 per cent of the insurance sum. Finally, under the CI Extra plan all adult conditions are included within the children’s cover, ensuring that this version is towards the top of the quality ladder.
In August, HSBC entered the critical illness market for advised business for the first time. Its plan is fairly comprehensive without troubling those at the top of the quality tables and the pricing and admin capability will ultimately determine whether the launch has been successful.
The complexity of navigating the critical illness maze can prove daunting for many advisers.
CIExpert has just launched a substantial upgrade and, as before, offers a free 24-hour trial for those advisers wishing to assess its effectiveness.