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Counting the cost

There was some interesting debate developing in the readers’ comments foll-owing on from the article headlined, Pru calls for rivals to go further on critical cover, in the May 26 edition of Money Marketing.

In our opinion, these comments missed one crucial point, this being that PruProtect’s critical-illness offering is not more costeffective because Pru is not paying amounts above the main amount of cover. Instead, Pru is making a partial payment of the main amount of cover which then reduces the amount payable for any other illness or a more severe form of the same illness.

We are making a payment in addition to the main amount of cover which does not reduce the amount of any other claim. If we followed the model of not reducing the main amount of cover and making an additional payment for less severe forms of other illnesses, the cost of cover would increase simply because we would be providing more cover. Essentially, we have managed to remain competitive even though we expect to be paying more claims and will certainly pay more claims for DCIS than those companies only offering a definition that requires total mastectomy because these are more common than total mastectomy. But this simply is not possible for many illnesses without a major effect on the cost of cover.

Ian Smart
Head of product development and technical support
Bright Grey and Scottish Provident

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