HSBC has made further inroads into the advised protection market with the launch of an intermediated critical illness (CI) policy. The move follows the provider’s launch last year of a life assurance proposition for sale through the adviser channel last year.
“Critical Illness” and “Critical Illness Plus” are now available as standalone contracts or with integral life insurance.
The basic Critical Illness plan offers 38 named conditions, two additional payment conditions (for low grade prostate cancer and carcinoma in situ of the breast) as well as terminal illness and total permanent disability cover. The wording for Parkinson’s disease also encompasses Parkinsonian Syndromes, of which multiple system atrophy and progressive supranuclear palsy are two.
However, HSBC includes these as separate conditions whereas corticobasal degeneration, diffuse Lewy body disease and Parkinsonism-dementia-amyotrophic lateral sclerosis complex, are not specifically named.
Alan Lakey of industry analyst CIExpert said that launch should “serve notice to advisers that the counting of conditions remains a pointless and misleading exercise”.
HSBC has included the typical benefits of up to 90 days immediate free cover for mortgage-linked applications and guaranteed insurability of up to £150,000 until age 55 for birth, marriage or increased mortgage borrowing.
Initially, plans are only available to those advisers that are able to access the UnderwriteMe system.
Child cover is automatically included in both plans starting from age 30 days until 18th birthday (to age 21 if in full-time education). For each of the two plans children are covered for the relevant adult conditions with the exception of total permanent disability and diabetes type 1.
Lakey said: “This is a solid plan offering a wide range of conditions which positions it as high quality without causing sleepless nights to those insurers sitting at the peak of the quality table. Its appeal to advisers will be heavily dependent on its pricing, administrative prowess and underwriting capability.
“By restricting child cover until age 30 days for their CI Plus plan numerous birth-defect conditions such as hole-in-heart have been excluded and this compares unfavourably against most of the quality plans in the market who have shifted to birth to 22 without a full time education requirement.”
Lakey said that one “curious” aspect of the Critical Illness Plus policy is the inclusion of bladder removal due to carcinoma in situ of the urinary bladder.
He said: “This is already covered within the less advanced cancer of the bladder condition which pays out purely on diagnosis, thereby rendering the inclusion of the bladder removal condition futile.”
Lakey said that advisers are often wary of insurers, particularly bancassurers, that have traditionally set out to gain direct to consumer business thereby placing themselves as rivals.
He said: “HSBC will therefore need to work hard to overcome such a mindset and to convince advisers that they are a major player and not a temporary entrant.”
Adam Higgs (pictured), head of research at industry analyst Protection Guru, said: “HSBC Life’s new CI offerings provide a clear and unambiguous approach to many of the higher incidence conditions. Their heart attack definition is particularly strong as it does not require results of certain investigations like many other insurers.
“Overall both the standard and plus propositions stack up well compared to the rest of the market albeit neither currently offer any of the added value benefit services most insurers now provide as standard.”