As part of its Serious Illness Cover (SIC) plan, Vitality has launched Dementia and FrailCare Cover. This is available at no extra cost and gives customers protection for a range of degenerative later life illnesses after the initial expiry of their SIC product.
Vitality says current solutions to the ageing population are falling short of the growing need for customers to prepare for the costs of living with conditions in later life, particularly with regard to degenerative conditions such as dementia, Alzheimer’s, Parkinson’s, stroke and general frailty.
Dementia and FrailCare Cover, which the insurer says is a first for the insurance market, helps people prepare financially for becoming frail and for the possibility of dementia in later life.
Care costs in later life can vary from minor costs such as devices to support people at home, through to nursing costs, and Dementia and FrailCare Cover aims to help fund some of these costs by making a severity-based payout following deterioration of health in later life.
Cover begins immediately following the end of the SIC term (but not after age 70), and effectively continues as a whole of life benefit. The benefit amount is equal to 50% of the remaining SIC benefit amount, with a cap to the overall benefit of £100k, which is index linked. For Accelerated Life and SIC policies, Dementia and FrailCare Cover also includes a Funeral Benefit equal to 10% of the remaining life benefit amount, subject to a cap of £10k.
What They Say
Herschel Mayers, CEO of VitalityLife and VitalityInvest, said: "Most people can expect to live longer than previous generations. Vitality’s unique approach to encouraging positive behaviour change has helped our members reach later life in better health.
"But in spite of this we cannot ignore the increasing prevalence and impact of conditions such as dementia and frailty in our society today. So far, the insurance industry hasn’t done nearly enough to recognise this.
"That’s why we’re especially excited to be announcing Dementia and FrailCare Cover. This is a world-first and addresses one of the most significant problems in the protection industry, and society more broadly, by helping people retain their dignity and independence during what can be a vulnerable stage of their life."
What We Say"The industry has proven to be rather slow at developing funding solutions to help people with later life care costs. Partly, that reflects its bad experience in the 1990s when long term care insurance never quite became the success its advocates thought it would, leaving a number of insurers to exit the market after years of losses.
"Vitality’s first solution (I can’t believe it will be its last) is a simple run–on after a customer’s SIC plan (pun intended?) has run its course.
"The sum insured is effectively halved (and capped at an indexed £100k so its real value should be broadly maintained) and the extended cover is available up to age 70 at entry, and there is a minimum term of ten years.
"It’s a simple and elegant solution and, while even £100k won’t go as far as many people will need, it can provide a massive initial help.
"The market needs more long term care funding solutions and this has the advantage of being simple, with customers just carrying on paying their premium after the normal end of their SIC term. And there’s no upfront charge to add this either."