Whether critical illness cover is still suitable for purpose is an ongoing debate among the industry. While most agree change is needed, with the exception of adding or removing a few random conditions it is largely left alone.
Do I feel critical illness cover is broken? Yes. But for a different reason than many. I believe the plans are too exclusive to the side of the population lucky enough to not have been diagnosed with a serious health condition.
As a special risks broker, we come across a number of clients not eligible for the majority of critical illness plans on the market, including those with HIV, diabetes, heart complications, multiple sclerosis and strokes.
In the UK, the number of people living with diabetes has increased by almost two thirds in the last decade, and the number living with HIV by nearly three-quarters.
I spoke to three clients in the last month alone diagnosed with heart conditions based on chance findings.
They were all young and asymptomatic. While we have been able to provide critical illness cover and sickness benefits for each of these, the options were extremely limited. How are the vast majority of advisers expected to provide these plans?
So why won’t insurers cover clients with these conditions? It is simple really. If somebody has a heart condition, HIV or diabetes they could be at a higher risk of having illnesses like heart attacks and strokes.
With cancer still taking the lead in critical illness claims, I wonder why we cannot exclude groups of conditions from the plans and let the adviser and client decide if it is right for them? Surely some cover is better than none?
The best reason I heard recently for not covering somebody with a congenital heart condition (asymptomatic with no medication) was: “What if the client
has a heart flutter at the top of the stairs, falls down and bangs their head?” But surely this could happen to anyone. Is this really a fair reason to reject somebody for something so important for financial protection?
There are providers moving to the exclusion method in certain areas. For example, people with low grading cancers can get critical illness cover with all cancer, or groups of cancer, excluded.
As yet, however, there is little available for people with heart trouble, multiple sclerosis, HIV or type 1 diabetes.
We have been providing advice to the National Aids Trust on the limits of financial protection available to people living with HIV. While as an industry we can offer some cover through fringe products and wider planning, I cannot help but wonder when the standard market and reassurers will complete the missing pages in underwriting manuals and start thinking of the future.
It is time for the market to wake up. As a nation we are seeing more and more people with pre-existing conditions. And as genetic testing becomes more widely available it is likely more will be aware of conditions that run in
As the country evolves, so too must the plans we offer. Not by adding more random conditions nobody has heard of, but by improving how we offer these plans without bias and discrimination.
Alan Knowles is director of Cura