Should CJD be put on the critical list?

Media horror stories surroun ding Creutzfeldt-Jakob disease, the human form of mad cow disease, are prompting a sharp rise in the number of doctors buying critical-illness insurance, according to evidence from IFAs.

If doctors are taking the threat of a CJD epidemic seriously, this may be a sign for insurers to rev iew their product design and premiums and for IFAs to think again about the types of conversations they need to be having with clients when it comes to protection.

But is it appropriate for IFAs and insurers to chase business on the back of often sensationalised headlines? The latest resurgence of CJD in the media will cast many minds back to the Aids scare of the mid-1980s when it was anticipated an epidemic would sweep across the population.

Swiss Re communications manager Tony Worthington says: “This had considerable impact on premiums, with levels for life and term rising dramatically when it was anticipated Aids would have the same impact on the hetero and homosexual communities.

“This has not been the case and since then premiums have dropped even below the pre-Aids levels. It is unlikely CJD will be linked to the same reaction as there have only been a handful of cases.”

But it is still possible that IFAs will find themselves facing inc rea sing numbers of clients worried about CJD.

Permanent Insurance sales and marketing manager Rod Macdonald says: “When you get a reported crisis like CJD, it is very effective at getting the public to realise their own mortality. From an insurer&#39s point of view, it helps our work to make people face up to the fact that they might need help.”

IFAs will need to make it absolutely clear to clients how CJD is covered by their policy.

Pegasus product development manager Nick Kirwan is chairman of the ABI&#39s critical-illness working party est ablished this year to establish “10 com mand ments” for product transparency. He says even if CJD is not named as a core con dition under a contract, it is likely to be covered under other conditions such as total per manent disability or terminal illness.

But Kirwan admits: “As part of research, we set up consumer focus groups. These showed they wanted to see named core conditions which would include CJD.”

Not all providers include CJD as a named condition even if they cover the disease. This might be set to change.

Calkin Pattinson consultant Kim North says: “I have not iced many critical-illness pro viders are revamping their products to include CJD as a named condition, which I think is a good idea. For example, Royal & Sun Alliance has recently launched a group CI policy which includes CJD as a named condition.

“Skandia has also just chan ged the way claims are pro cessed which could have the effect of speeding up the time it takes to get money once clients discover they have CJD. This is good because you might need to get the money out pretty quickly.”

But some providers are satisfied it is clear that CJD is covered even if it is not named specifically. Bupa has decided not to include CJD as a core con dition although its policyholders are covered.

Spokesman Adam Lewis says: “We did consider including CJD as a named condition but it is covered automatically by either total permanent disability or loss of independent existence, which applies when individuals cannot perform three activities of daily living like washing. A claim can also be eligible under pre-senile dem entia, which allows a claim once CJD has been diagno sed.”

But in some cases insurers might not pay out at diagnosis, so IFAs need to check exac tly when their client can claim.

Macdonald says: “There can be a difference between the timescales of when people can claim once they have been diagnosed with CJD when it is not a core condition. For example, there could be a time lag between diagnosis and when a person needs 24-hour care and can be classed as being totally and permanently disabled.”

Increasing numbers of peo ple may follow the lead of doctors and enquire about CI cover on the back of the head lines. Even if CJD does not reach epidemic proportions, IFAs will be responsible for scrutini sing what insurers are offering to ens ure cli ents know what level of protection they are getting.