This whole of life policy is available to UK residents aged between 50 and 75 at outset. Single life only cover is offered and the maximum sum insured is £40,000. Underwriting is by answering just four medical questions, either online or by telephone. An additional lifestyle question simply asks about smoker status. There is no claims moratorium on the policy and customers go on risk immediately.
Premiums are fixed throughout but cease at age 90, with cover continuing until death. An Advance Claim payment option means Cigna will pay the lower of £5,000 or 20% of the sum insured within 48 hours of receiving all relevant documents. The balance of the sum insured is then payable once medical records have been assessed.
Trust forms are available from Cigna on request.
A 65 year old non-smoker would pay £15 a month for £3,336 of life cover. That compares to £2,784 of cover for the same premium with the equivalent plan from Legal & General, £2,690 with SunLife and £2,476 with Aviva, Cigna’s website says (based on rates on 20 May 2015).
What They Say
Chief executive Susan Stevenson said: "The life insurance market is changing – many ‘empty nesters’ are becoming ‘full nesters’ but the market has failed to adapt to their needs. Many ‘middle income’ healthy over 50s carry an increased financial burden, supporting parents and children, but neither guaranteed acceptance plans nor fully underwritten life policies are fully meeting their needs. The Cigna Over 50s Life Plan will offer these customers significantly better value."
What We Say
"Getting life cover when you are older typically means being fully underwritten [page after page of detailed medical and other information having to be disclosed] but getting immediate full cover [as long as no external medical information is needed]. Or it means guaranteed acceptance, but with full cover only kicking in [accidental death excepted] after between six months and two years.
"Cigna’s new plan offers a third way – minimal underwriting [just four questions] but with both immediate cover and with premiums only payable to age 90. That avoids the situation common on many guaranteed acceptance plans where if you stop paying you get nothing, but if you carry on after a decade or so, you may end up getting back less than you’ve put in, with value getting worse and worse month by month. Some see that as the next breaking misselling scandal, and they may have a point.
"Bear in mind that on Cigna’s own figures, a 65 year old will have paid in more than the plan’s sum insured if they survive to age 90. But ONS figures for 2011-13 show that average life expectancy for males [in England and Wales] at age 65 was just 18.6 years, so many will not get to that age anyway.
"Could you get better rates by being fully underwritten? Often, yes. But many people see insurers’ questions as intrusive, embarrassing even, and a tool to help insurers refute claims if the tiniest detail is missed or miss-remembered. Or the insurer may all too often apply a rating if medical history is disclosed fully. The reality may be different, but the perception persists, and older people by definition are likely to have longer medical histories and to have had more health issues.
"What if they fail the four questions test? If any rating is modest, this plan may still be the best option. Otherwise, as long as they expect to live a reasonable period, a guaranteed acceptance plan may be a better choice – but not if they die during the initial period or live too long.
"We like the fact that the underwriting here is simple [reminding us of one of the reasons mortgage endowment policies were so popular back in the 80s], that premiums are limited to age 90 and that the website is straightforward and helpful. Trusts could and probably should be given a higher profile, but we even like the fact that only single life cover is available – too many people have bought joint life cover, only to discover that the need for cover continues after a first death. Overall, this plan could do well."