L&G has introduced a number of changes to its existing critical illness (CI) insurance plan. The main changes are:
- Low grade prostate cancer is now covered. The plan will pay the lower of 25% of the full sum insured or £25,000. The customer only needs to have had treatment for the condition to trigger a claim.
- The definitions for three illnesses have been improved to ABI+. They are multiple sclerosis (where the six month minimum has been removed), cancer (as well as malignant melanoma, other skin cancers are also now covered, as long as they have caused invasion of the lymph glands or spread to other organs) and stroke (the traumatic injury to brain tissue or blood vessels exclusion has been removed).
- The definition for ductal carcinoma in situ (DCIS) of the breast has been widened to provide cover for any type of surgery used to treat DCIS.
- The exclusion period for terminal illness cover has been reduced from 18 to 12 months before the end of the policy.
- The maximum age for children’s cover is now raised to 21 if the child is in full time education.
- On joint life policies, the non-claimant can now replace their cover without full underwriting.
- Joint life policy customers can now replace their single plan with two single life policies without full underwriting, subject to certain conditions.
In total the plan now covers over 40 conditions. DCIS and low grade prostate cancer both pay 25% of the sum assured, with the plan continuing after a claim. Premiums can be guaranteed or reviewable and available terms are from two years to 40, or to age 70 if earlier. Mortgage decreasing term cover is also available (minimum term five years).
What They Say
Product and technical director for individual protection, Bonnie Burns, said: "Our key focus is to help people when they are at their most vulnerable and we want to pay as many claims as possible. Less than 5% of our critical illness claims are declined for not meeting the definition, but we want to get this figure even lower. Last year we paid out £177m to 2,784 customers and we hope to pay even more in the future. Our customers want to know that should the worst happen they have the cover in place that will do what it promised when they bought it. These enhancements will help us ensure we deliver on that promise."
What We Say
These are highly technical changes but nevertheless welcome. In essence they mean that more people will be able to claim in future than would otherwise have been the case.
At the risk of repeating ourselves though, there is no indication of just how many people could expect to benefit from these changes, so it is hard to know how important they are in practice. Again, that is not a criticism of L&G (or other insurers who have made similar changes to their CI plans), but it does make an IFA’s job harder if you know that something is good, but not how good.