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Defining moment

Several of the big protection brokers, including Lifesearch and Direct Life & Pensions, believe insurers should backdate any definition changes to critical illness policies.

They fear a failure to do so risks leaving two classes of policyholders on their books. In practice, there will be winners and losers on both sides, in that old policies may be more generous in some circumstances.

The brokers propose that it is only where an updated definition is beneficial that a policy should be “modernised”.

On the face of things, this seems a good idea but we wonder if it does not create complexity for life offices which have priced according to the old regime.

It all comes down to cost but if the change could be brought in for a reasonable price, the benefit to reputation and the value of such a good news story should not be underestimated. Maybe individual offices will do so as part of a broader retention strategy.

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