Life Protection is a term policy (available to age 90) that also pays out on terminal illness. Critical Illness Protection pays the sum insured on diagnosis of a specified critical illness, on terminal illness or on undergoing specified surgery. It can run to age 70. Unusually, CI and life are not offered combined, as Guardian points out that can mean no more life cover after a CI claim is made. Instead a multi-policy discount applies.
Policies are available to UK residents aged between 18 and 65. Cover can be level, decreasing (in line with a 5% repayment mortgage), or increasing in line with inflation. Instead of a lump sum, benefits can be paid as a family income benefit, with annual payments until the end of the term.
In addition, customers can add Children’s Critical Illness Protection and Fracture Plus Protection.
The products have a number of unusual or unique characteristics including:
* No general exclusions are applied. Instead, they are applied on a case by case basis.
* Instead of long medico-legal definitions for stroke, heart attack and multiple sclerosis, Guardian pays out if a UK consultant says that event has occurred.
* The cancer definition includes all malignant skin cancers – with no exceptions.
* Terminal illness benefit applies the normal 12 month rule but also pays out on diagnosis of stage 4 cancer, motor neurone disease, Parkinson-plus syndromes and CJD, regardless of life expectancy.
* Joint life cover is not available – again that could give rise to having no cover after the first death/event. Instead a multi-cover discount applies.
* Every customer automatically gets premium waiver benefit at no extra cost – and with just a one month deferred period.
* Reserved Cover. Guardian underwrites for the full level of cover it can offer. The difference between that and what the customer has applied for is then available just on answering few simple health questions for 27 months.
* Payout Planner. This enables clients to contractually gift the life insurance benefit by nominating beneficiaries. Guardian records this so it can pay out benefits fast on death.
* Children’s CI cover is a separate policy (so non –parents do not pay for cover they don’t get anyway). Cover can be from £10K to £100K and the cover can be added or removed at any time.
* If Guardian improves its CI definitions, clients can have the new improved definition. In some cases that may incur a higher premium.
* Decreasing mortgage cover uses a standard 5% interest rate plus a guarantee that the death benefit will repay the client’s outstanding mortgage.
* Most rated clients still get guaranteed insurability.
* When a claim is made a HALO service allows Guardian’s claims team to access a network of medical, legal and financial experts to help people who need it – in most cases at no cost to the client.
* Guardian Anytime offers up to four virtual GP appointments a year, plus physiotherapy, a second medical opinion and mental health support.
What They Say
Simon Davis, Guardian CEO, said: “The single most important thing about a protection policy is that it pays out. If someone has a critical illness policy, they quite rightly expect it to cover them if their consultant says they’ve had a heart attack. They don’t want any anxiety over whether their diagnosis is eligible. At Guardian, we use simpler, broader definitions without general exclusions. So, when our customers need their policy to pay out, it will.”
What We Say"First, it’s great to see a new name entering the protection insurance market and, very sensibly, Guardian is proving the concept by starting with selected advisers before rolling out the brand during 2018. So you may have to be patient…
"The products themselves on one level are conventional – standalone term insurance and CI. However, the devil is in the detail and that’s where Guardian looks to excel.
"One of the frustrations of being a product reviewer is that so often an insurer can be really good on the big picture and even offer market leading rates, but the fine detail is too often glossed over or done badly.
"Take waiver of premium (or premium waiver as Guardian calls it) as an example. Insurers often offer it to non-rated clients, who pay extra for it and the deferred period is mostly a too long six months. Guardian’s approach is to give it to everyone at no extra cost and have a one month deferred period. On children’s CI cover, parents must pay for it so there is no cross subsidy from non-parents. In return they can get much more cover – up to £100,000. Insurers have always cited moral hazard for limiting children’s CI cover (essentially they don’t want to encourage parents to harm their children), but the actual risk is tiny.
"The definitions of heart attack and stroke, are simple to understand and recognise that UK consultants don’t need a long technical definition and nor should protection insurance customers.
"Of course, nothing is perfect and Guardian is no exception. So, older clients can’t (yet?) get cover and, like all new insurers, Guardian has to prove it can deliver what it promises and to handle the volumes of business it will get,. And its rates will have to be competitive too.
"But, at outset Guardian looks to be doing some things differently – not just to be different but because doing it differently should actually benefit most customers most of the time. That’s a breath of fresh air and we shall watch future developments with interest."