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Driving forces for better CI definitions

Earlier this month, the ABI’s critical-illness working party announced that the definitions of claimable conditions should be tightened to make them “future proof”. There will be further consultation during the year to finalise the new definitions. It looks likes Alzheimer’s disease and HIV transmitted through non-sexual activity will be added to the list of claimable conditions.

About time, I hear insurers and advisers shout. Providers need to protect themselves from a rising number of claims and advisers need to protect themselves in an increasingly litigious society where misselling claims are becoming increasingly commonplace.

Medical advances have increased life expectancy far beyond that of even our recent ancestors. The cost of treatment measured by medical inflation has risen much beyond our normal cost of living although Bupa has just announced a decrease in its medical inflation factor from 10.25 to 9.75 per cent.

I know this sounds like a crude comparison but statistics on the frequency of car claims and repair costs, broken down by type and region, are more readily available. It is relatively difficult to gather similar information about CI although providers sharing data on the percentage of claims they decline is a welcome move.

It is a sadly true that the average individual will spend more on maintaining their car than on maintaining their health. We need to encourage the public to seek regular medical screening or health checks and this must be coupled with education.

I try to have a well-woman check every year but I usually leave despondent that I have been nagged about cholesterol readings, which have only recently appeared as a common conversation piece over the dinner table. As I grew up in the North-west, what on earth do they expect? As medical procedures advance, once life-threatening conditions can increasingly be treated without lengthy hospital admission. People’s expectation of surviving many horrendous diseases is now much greater but the statistics remain that one in four will suffer from a heart attack, one in three will get a life-threatening cancer and one in 20 will have a stroke by 70. Nearly half the people who contract cancer of the breast, cervix, larynx, testis, uterus or a malignant melanoma will survive for at least five years. Survival rates for many other cancers are also improving.

There are over 150 different CI policies on the UK market. In order for IFAs to be able to select from the whole range of products, they need to need to know that the definitions remain current and products competitively priced. If there was ever one range of protection products that clients need independent advice about, it is CI.

IFA John Joseph is to be commended for his sterling work in investing in and building what he calls “the biggest critical-illness cover website in the world”. He claims the site allows the public and financial advisers to access the information needed to find the best policy. He has fought hard to get uniform definitions of illnesses across all the available products to match the expectations of clients and IFAs.

I have helped individuals with limited life expectancy to realise the wishes they have for their loved ones at this most difficult time. This is the primary benefit of life and CI cover. To this end, we have a responsibility to educate and guide the public through their financial choices.

We forget sometimes that the responsibility of financial advisers is to enable people to make provision to live in the house want, debt-free, with a reasonable lifestyle that they can maintain in sickness and in health.


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