In the last three months, protection providers all appear to be doing something different, with some opting to simplify cover while others look to fatten-up existing policies.
In August, AIG launched its budget Critical Illness Cover (CIC) product, Key 3, that pays out on diagnosis of the most common three diseases – heart attack, cancer, stroke – promising to be easier for brokers to explain to consumers. While it is not comprehensive, simplified CIC cover is better than no cover at all and the product should open CIC to more people on tight budgets.
In September, British Friendly announced a new form of carer’s cover, Care Assistance Benefit, that comes as part of its income protection product. It pays a flat amount of £125 a week when the partner or child (up to age 18) of a member needs full-time care of 35 hours or more a week for a continuous period of four weeks. When a claim is paid, it will be backdated to day-one and paid for a maximum of 26 weeks over the life of the policy. At no point is state benefit assessment needed.
More recently, Royal London updated its critical illness claims conditions (over 60 early stage cancers are now covered under nine definitions) and Vitality has announced more partners as part of its healthy-living rewards program to encourage healthier lifestyles, leading to more consumer engagement with its health and protection products.
While the most widely-sold protection product remains life insurance, especially alongside a mortgage, CIC and income protection remain more likely to be claimed upon. It’s more likely a policyholder will suffer long-term sickness in their lives than pass away during the term of a policy. With this in mind, there have been many efforts over the years to improve the public, and adviser, perception of these products as being a higher priority for people with an income to protect. These initiatives over the last few months, add value and may make for an easier sell to clients.
There is plenty of good quality product variety and innovation in the CIC and income protection market and there really is no reason for advisers to avoid that conversation with clients.