Protection advisers realise that the world of critical illness (CI) plans is a nebulous landscape where, as soon as plan details are understood, an insurer opts to introduce changes that require understanding and a reappraisal.
Thus far, 2024 has exhibited the same behaviours, and the panorama has morphed yet again.
Hitting the ground running
Scottish Widows started the ball rolling in early January.
It introduced changes to cancer, heart attack and dementia in line with the Association of British Insurers’ (ABI’s) mandated minimum wordings, although it opted to not introduce the exclusion for stage 1 thyroid cancer.
Later in January, AIG followed suit, however it did exclude stage 1 thyroid cancer. As with Scottish Widows, the other changes were primarily clarifications.
The first meat and gravy change occurred in April, when Legal and General made numerous changes to its plans. Having applied the thyroid cancer exclusion during 2023, it now removed it from its CI Extra plan, leaving it in place within its core plan.
It included two new 100% payment conditions – severe mental illness and severe bowel disease. Moreover, the additional payment ceiling was raised to the lower of £35,000 or 50% of the insured sum.
These and other changes elevated L&G’s Extra plan back up the quality tables.
The most notable innovation arrived during May, when Zurich introduced a paid for suite of health and wellbeing benefits. This option costs £9.50 per person but includes global treatment, cancer clinical trials support, private diagnostic plus as well as other valuable support.
Aviva and L&G have previously offered certain paid for services, but by introducing this major suite of benefits, Zurich has deconstructed its plans into their component parts, enabling advisers to better design coverage for their clients. This redesign sets the scene for future changes by all insurers.
More critical illness cover adjustments as the year went on
During June, British Friendly Society introduced a children’s critical illness option for new Protect and Breathing Space plan holders.
Any sum of £1,000-25,000 can be selected and provides cover against 57 100% conditions and an additional 20 conditions that pay 50% of the insured sum.
The plan runs from birth to the 18th birthday (23rd birthday if in full-time education). Death or terminal illness benefit is not included. Many clients may be denied their own critical illness plan and thus are usually denied children’s cover. This innovation resolves the problem.
Finally, as June ended, Guardian introduced several positive changes. The most noteworthy was the doubling of the maximum additional condition payment to 50% of the sum insured from the previous 25% – the maximum payment remains limited to £50,000. Low-risk non-melanoma skin cancer remains as before at the lower of £50,000 or 10% of the sum insured, and surgery cover also stays at the lower of £50,000 or 25% of the amount insured.
For clarity, as this is not a condition change, the upgrade is not being backdated to existing policyholders.
All these developments are positive and should instil confidence in advisers to further promote this valuable product.
CIExpert continues to reflect these changes as they occur.
