Pru calls for rivals to go further on critical cover
Share
PruProtect says Bright Grey and Scottish Provident’s additions to their critical-illness cover could have gone further to provide more comprehensive cover for conditions other than cancer.
Last week, Royal London’s protection businesses Bright Grey and Scottish Provident added CI cover for low-grade prostate cancer and an early form of breast cancer called ductal carcinoma in situ. They have also added five new CI definitions.
PruProtect actuarial and product director Deepak Jobanputra says it is positive that the providers are looking at severitybased payments where payouts can be made at an earlier stage of a condition but the changes do not go far enough. He says: “It is a slight shame they do not apply more comprehensive cover across other conditions besides cancer. We would like to see more providers embrace severity to provide an ultimately better outcome for consumers.”
Bright Grey and ScotProv head of product development and technical support Ian Smart says: “If we were to try to add cover across all conditions, the claim frequency would start to become quite high, which would add costs to the policy.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (9)
Jeff Crosby | 26 May 2011 12:51 pm
This is spot on - why cover just some conditions on a severity basis? If it costs too much then how are Pru doing this so cost effectively?
Unsuitable or offensive? Report this comment
Anonymous | 26 May 2011 3:26 pm
Good question Jeff - what claims experience have you seen from Pru?
Also please note Ian's comment, clearly they don't think their new conditions will result in them paying more claims - 2 examples of the conditions race at its worst!
Unsuitable or offensive? Report this comment
Anonymous | 26 May 2011 4:03 pm
Maybe Ian can also clear up when we can expect to see the full year 2010 claims stats for Bright Grey?
Unsuitable or offensive? Report this comment
Alan Lakey | 26 May 2011 9:54 pm
There has to be a trade off - cover more conditions but pay out less on the majority of them.
It is good that there are different approaches, this allows advisers and consumers to make a judgement call.
Surely we don't want homogenous products where the main determinant is cost?
Unsuitable or offensive? Report this comment
pete wildebeast | 27 May 2011 9:58 am
I quite like the Pru approach to partial payments, but as most critical illness business is written to cover a mortgage - the partial payment model isn't always ideal. Instead of paying off some of their mortgage people might be tempted to spend it on something else - and then find themselves in trouble at a later date.
Unsuitable or offensive? Report this comment
roger edwards | 27 May 2011 11:16 am
To the first anonymous - on the contrary - I expect that these early forms of cancer will represent a significant level of claims in the future.
I have always been quite critical of the "illness race" but the reality of the market is that unless providers play the game then their score goes down and they stop getting recommended because someone else has a longer list.
Unsuitable or offensive? Report this comment
Donald Donaldson | 31 May 2011 11:01 am
Perhaps instead of adding more conditions There is a real need to start to explain what the conditions are and the actual chances of paying out.
Ifa's need to be given the tools to have the conversations with clients around what cover they have and what chances they have of a pay out.
How many people who have a Pru Protect serious illness plan genuinly know exactly what they are covered for other than 'quite a lot of conditions'.
If providers like Bright Grey continue to play the conditions game they are only going to add to the confusion of the contract.
People cancel policies because they do not know what they are paying for.
Unsuitable or offensive? Report this comment
Glyn Brooks | 31 May 2011 7:59 pm
DD - All the companies explain the conditions, it's for brokers to learn them properly instead of not doing the job properly and advise the client. The other option is that you tell the clients what the2 best options are - 43 conditions covers to 100% with Bright Grey/Scot Prov or 161 covered with PP of which 48 pay out 100%, and the rest are partial payout but more likely to pay out, get a PP BDm round to explain it
Unsuitable or offensive? Report this comment
Donald Donaldson | 1 Jun 2011 10:31 am
Glyn- 48 pays out 100% of their claims not 100% of all claims. I think the important point here is that more conditions does not always lead to more payouts. Why is it that the company in the market place that has the least amount of conditions paid the most out Aviva has 32 conditions and paid out 95% of all claims. Many of these extra conditions are ambigious at best and the companies who add them know it.
I have never had a call from our PP BDM nor have I seen any annual claims stats from them. As previously posted partial payments will not cover a mortgage. I agree on size does not fit all but partial payments are of a concern.
Unsuitable or offensive? Report this comment