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CI Expert: Children’s cover for CI

It is potentially an emotive subject but the reality is CI for children can be an important component of a good quality policy

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Critical-illness cover for children is an important if frequently overlooked feature of good quality critical-illness plans.

Claims for children account for around 5 per cent of all CI claims, of which the majority relate to cancer.

When you consider that heart attacks account for 10 per cent of all CI claims, you can gauge the significance.

Cover for children can be a difficult subject to discuss as it is far more emotive than self-cover.  Nonetheless, statistics can play their part in signifying the value.

Some plans fail to include this cover, notably Bright Grey’s Lifestyle Protection plan, Foresters, HSBC and NFU Mutual.

The remainder express the payout as a percentage of the parents’ cover with an overall maximum which is generally £25,000.

Major differences can occur in the claim definitions and the tables, using information taken from the CIExpert knowledge base highlights some major differences.

Skandia stands out by covering children from birth and, like Ageas, applies a 10-day survival period compared with the typical 14 days and the much longer 30 days used by Beagle Street.

Friends Life includes familial and congenital conditions while Skandia will double the payout for a joint life plan where both of the insured are the parents. Unlike other insurers, Skandia does not include partial payment conditions within the children’s cover. Legal & General additionally includes £4,000 of child death benefit.

Using a percentage of the parents’ cover with an overall financial limit means that some plans are far less effective for sums assured below £100,000. Table 2 highlights how this impacts on payouts.

Alan Lakey is founder of CI Expert

Table 1: The level of CI cover provided for children by provider

Children’s CI cover – the level of cover provided
  Max Sum Paid Max % of Parents Cover Age Limits Survival Period

Aegon

£25,000

50%

30 days to age 18

14 days

Ageas

£25,000

50%

30 days to age 21

10 days

Aviva

£25,000

50%

30 days to age 18 (21 if full time education)

14 days

Beagle Street

£25,000

25%

30 days to age 18

30 days

Bright Grey (menu)

£20,000

50%

30 days to age 18

14 days

Bright Grey LPP

Not included

Foresters

Not included

Friends Life

£25,000

25%

30 days to age 18

14 days

HSBC

Not included

Legal & General

£25,000

50%

30 days to age 18 (21 if full time education)

14 days

LV=

£25,000

50%

30 days to age 18

14 days

NFU Mutual

Not included

PruProtect

£25,000

50%

3 months to anniversary prior to 19th birthday

14 days

Scottish Provident

£20,000

50%

30 days to age 18

14 days

Scottish Widows

£25,000

50%

6 months to age 21

14 days

Skandia

£25,000

50%

From birth to age 21

10 days

Zurich

£25,000

50%

3 months to age 18

14 days

Table 2: Impact of percentage based payout depending on the size of parents’ CI policy

Impact of a percentage based payout for children’s CI cover
  Payout on £50,000 plan Payout on £75,000 plan Payout on £250,000 plan

Aegon

£25,000

£25,000

£25,000

Ageas

£25,000

£25,000

£25,000

Aviva

£25,000

£25,000

£25,000

Beagle Street

£12,500

£18,750

£25,000

Bright Grey (menu)

£20,000

£20,000

£20,000

Friends Life

£12,500

£18,750

£25,000

Legal & General

£25,000

£25,000

£25,000

LV=

£25,000

£25,000

£25,000

PruProtect

£25,000

£25,000

£25,000

Scottish Provident

£20,000

£20,000

£20,000

Scottish Widows

£25,000

£25,000

£25,000

Skandia

£25,000

£25,000

£25,000

Zurich

£25,000

£25,000

£25,000

Alan Lakey is founder of CIExpert

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