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Phil Jeynes: Going for gold on partial payments

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I was on a panel recently for a debate around protection at a national network. One of the questions posed was “do you see the current trend towards partial payments and severity based cover in the critical/serious Illness market continuing?”.

The discussion that followed reminded me of a conversation I saw on TV the other week. It was just after Jenny Jones had won a medal in the snowboarding at Sochi and the assembled guests were full of hyperbole and praise for the achievements of the plucky Brit. After a couple of minutes, a puzzled looking Scandinavian on the panel piped up “it was a bronze she won, right?”.

Ok, we aren’t a nation famed for our alpine prowess and Jones did most of her practice on a carpet slope in Somerset so we’re right to be proud, but an attitude of being overly happy with some progress is often a bad thing.

PruProtect helped revolutionised the CI market in recent years by covering more early stage and less severe conditions, leading to other insurers offering partial payments alongside their traditional products, but there remains much work to be done if we are to bring the market up to scratch, particularly given modern medical advances.

March is Prostate Cancer Awareness month in the UK and this one condition illustrates my point, perfectly. This form of cancer (in its low grade form) is the most common among men, yet until 2007 no CI plan on the market paid out for it.

This was because (correctly) low grade prostate cancer was deemed “not severe enough” to warrant a pay out of a full CI sum assured. Progress has been made and now every major insurer offers a partial payment for this condition – varying from 20 per cent to 25 per cent of the total insured amount.

Good news then, certainly, but gold medal standard? Not quite.

There remains no traditional critical illness provider which pays out on diagnosis of low grade prostate cancer alone, with all insisting some treatment or medication is undertaken before the cheque goes in the post.

Sounds like a small point, doesn’t it? Like I’m nitpicking? Well consider the fact that advice to doctors, given by the National Institute for Clinical Excellence, states an initial period of “active surveillance” of the condition is the preferred choice ahead of any surgery or drugs. Surgery which, given the prostate’s proximity to the nerves around the bladder and rectum, often results in impotence and incontinence.

Imagine explaining that little wrinkle to a client whose claim has been declined, despite having a policy which specifically covers the condition they have contracted.

So, will the trend towards severity based cover continue? Yes. Because it has to if we are to stop failing customers.

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  1. Good article but, to be nitpicking, Skandia Protect was the first company to include early stage prostate cancer as a partial payment in June 2003.

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