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CI Expert: The big problems with ABI+

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Like most other industries, financial services seeks to glamorise and promote its products with every tool at its disposal. Sometimes these tools lose their precision and therefore their value and then the constant promotion becomes not so much a pointless exercise as much as a deceptive one.

So it is with the much hyped term ABI+. When the ABI Critical Illness Working Party first provided model definition wordings in April 1999 the intention was to remove the various confusing plan wordings. The objective was to add confidence for both advisers and consumers when assessing the relative values of one plan over another.

Jump forward to 2013 and we now have model wordings for 23 conditions plus total and permanent disability cover and we are surrounded by insurers hyping the numbers of ABI+ definitions within their offering. Providers parade the idea that because their plan has one extra ABI+ condition then they are better than their numerically poorer neighbour. Marketing spin, naturally, but one which can and does mislead the unwary. 

Number of ABI+ definitions met by protection providers

 Aegon 14

Ageas 17

Aviva 17

Beagle Street 11

Bright Grey (Menu) 12

Bright Grey LPP 0

Foresters 0

Friends Life 18

HSBC 12

Legal & General 15

LV= 18

NFU 2

Scottish Provident 12

Scottish Widows 0

Skandia 18

Zurich 10

Whilst some advisers may fall for this hyperbole others will realise that it is far too simplistic to count conditions. Others may have already realised that the term ABI+ is rendered meaningless by virtue of the numerous differences in how each definition extends the cover.

Put simply, ABI+ means that the definition goes beyond the minimum requirements of the ABI model wording. In some instances the extent of the improvement is minimal whereas with others it may be substantial.

Also, with over 60 conditions – some of which are partial payments limiting the claim to £25,000 or less – is the use of ABI+ even meaningful when less than 40 per cent of the conditions currently have model wordings?

So how much assistance is this term to advisers looking to make the correct choice of provider for their clients?

Consider table 1 which looks at benign brain tumour.

Table 1: Level of cover offered for benign brain tumour

Different levels of cover for benign brain tumour
  ABI Wording + Removal of Tumour + Partial Removal of Tumour On Diagnosis Only

Aegon

Y

Ageas

Y

Aviva

Y

Beagle Street

Y

Bright Grey (Menu)

Y

Bright Grey LPP

Y

Foresters

Y

Friends Life

Y

HSBC

Y

Legal & General

Y

LV=

Y

NFU

Y

PruProtect *

Y

Scottish Provident

Y

Scottish Widows

Y

Skandia

Y

Zurich

Y

* 25 per cent of sum assured

Source: CI Expert

The ABI model wording requires permanent neurological deficit with persisting clinical symptoms. Just under 50 per cent of tumours are operated on and not all tumours can be fully removed, Astrocytoma’s which account for 40 per cent of benign brain tumours being a prime example.

So, whilst eight companies can claim ABI+ status, because they extend their cover to full removal of the tumour, their definition is less effective than that of Aviva, Friends Life and Skandia which additionally covers partial removal.

Even these three companies offer a less effective definition than LV= which is the only current plan that pays out on diagnosis only.

Or how about third degree burns, where the ABI definition stipulates 20 per cent of the body surface area?

Bright Grey, LV=, Scottish Provident and Zurich extend their definitions to encompass 50 per cent burns to the head.

This is ABI+ but it is eclipsed by Aegon, which also covers 50 per cent of the face and 30 per cent of the head and neck. Friends Life and LV= cover 30 per cent of the face whereas Ageas, Aviva and Legal & General only requires 20 per cent burns to the surface of the face.

In this instance the term ABI+ is useless in enabling advisers to differentiate between providers.

At CIExpert we ensure that subscribers can easily determine these often minor but nonetheless importance distinctions. More to the point, you will not find us advocating the use of ABI*+ descriptives as they will likely deceive rather than inform.

Alan Lakey is founder of CI Expert 

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