Like most critical illness (CI) insurers, Friends Life has periodically updated its critical illness policies to meet new market needs or to develop the market further. Its latest round of updates has included adding a market first, a new benefit called Extra Care Cover.
Extra Care Cover pays a separate £50,000 cash lump sum in addition to the plan’s main sum insured where the customer meets one of three criteria:
* They meet the CI definition for loss of independence or are diagnosed with dementia, Parkinson’s disease or motor neurone disease under age 50.
* They are diagnosed with locked in syndrome, permanent vegetative state or minimally conscious state before the first anniversary of meeting the definition for a critical illness or total permanent disability.
* On the first anniversary of meeting the definition for a critical illness or total permanent disability they suffer from either:
− permanent severe heart failure or
− permanent loss of independence and the total and permanent loss of the ability to perform routinely at least three activities of daily living.
What They Say
Aviva’s chief underwriter for protection, Robert Morrison, said: “Extra Care Cover will give additional peace of mind to those customers who are left with severe and permanent symptoms, helping them cope financially with the necessary adjustments to their daily lives.”
What We Say
"CI insurers have worked hard in recent years to prove that their plans do pay out on all genuine claims and should be applauded for that. But they still face the very real issue of not being trusted by people.
"As well as being a valuable benefit in its own right, Extra Care Cover could help further in that it shows a ‘warmer’ side to insurers. It recognises that in some situations a lot of expensive care may be required for as long as it is needed. Of course, that is what the plan’s sum insured is there to provide. But, if the sum insured has been chosen to say pay off the mortgage (which is often the case), significant money worries may arise if the claim is, for example, because the insured has Parkinson’s disease. To keep things simple, Friends’ has decided on a single benefit of £50K which, although it will provide a lot of care, may not meet all requirements for ever. Nevertheless, it’s a valuable benefit that can be seen as a sort of ‘super TPD’ for some of the most serious CI situations and the idea of keeping things simple makes sense. In any event, if more cover may be needed then perhaps a higher sum insured could be chosen initially anyway.
"Extra Care Cover is an interesting development, and one that is sure to expand the scope of CI further."