Skandia Life already considers itself a bit of an innovator with a new critical illness (CI) product which covers two additional illnesses, a claims guide and links to the Best Doctors advisory service. Now, it says, it is to add an “evolutionary” feature – although it is still playing its cards close to its chest.
October 2000 saw Skandia Life launch a 25-page “no-nonsense” claims guide, boasting it had set a precedent within the industry. A press release stated the company “wants” to pay out claims, and paid out £44m in 1999. Life marketing manager Lynda Cox (above) says: “This industry has a reputation of not paying and we feel that is not justified.”
The guide contains information on what happens when a claim is made, the paperwork that is required to support it, and a case study of a rejected claim. Cox says: “We produced the guide because we feel that it is important that people understand the reasons why we won’t pay out a claim.”
In January, Skandia Protect was launched. This married the Unit Linked Flexible Whole Life product launched in 1991 with a term-assured product to create CI with or without life cover.
Marketing literature assures that Skandia Protect will “shake-up the protection market” with its invention of a “revolutionary ‘rolling term’ approach to CI insurance”.
Cox says that the term assurance structure is clear and straightforward compared with the unit-linked policy. Premiums are guaranteed for a fixed term, for example, ten years. Towards the end of that term, clients have the option of rolling their cover forward and paying another guaranteed premium for a further ten years. “That way you know exactly what you are paying for,” says Cox.
The unit-linked policy involves paying a premium which is not fixed. She says: “Many people didn’t understand it but we do still offer that cover. But rolling term is cover that can last indefinitely.”
The policy also covers two conditions that other companies do not: cardiomyopathy (an inflammation of the heart muscle) and progressive supra-nuclear palsy (a debilitating illness similar to Parkinson’s but affecting eyesight). However, Cox believes other companies will follow suit in the future.
Cover automatically includes children’s benefit, surgery benefit, serious accident and continuing cover following a claim for joint life policies.
The product is linked to Best Doctors, an advisory service which helps people find the nearest specialist to treat the condition afflicting them. Best Doctors is free of charge to anyone who has made a claim – although consultations are not.
Cox believes Skandia Protect appeals to everyone. For example, those without dependants could use the lump sum payment to pay off the mortgage, while those with a family could take out CI with life cover to protect their loved ones financially should the policyholder die.
Cox has wild ambitions to propel the product to the position of top term CI provider by the end of the year, but only 2,000 IFAs have been targeted so far. As late as last month, many intermediaries were concerned they had not yet received any communication. And with around 28,000 more to go, the sales executives will need to get their skates on. She says: “We haven’t got round to them yet but are very much in touch and on target.”
Skandia Life hopes a substantial proportion of business will be conducted entirely on-line in the future. It sells all its products mainly through IFAs and everything the intermediary needs to write business is on the site, according to Cox.
This year Skandia aims to build on the successes of the past year. Cox says: “We achieved our best business year in 2000. We never stand still and have future developments to announce, like an evolutionary product with many facets so you can buy other parts to go into the Life pot.”