The critical-illness insurance industry has an image problem. Hardly a week seems to go by without reading newspaper stories about claims being turned down and customers being blamed for not disclosing the full facts or not meeting the policy terms and conditions.The industry generally shrugs its shoulders and says: “Rules are rules.” Providers and reinsurers may feel perfectly entitled not to pay but customers see this as yet another example of a big, nasty insurer using the small print to avoid paying. We have to deal with this image problem. That somebody does not meet the strict policy definitions does not hide the fact that these customers bought a policy that they believed would pay out when they were ill. They are understandably shocked to find that they have the “wrong” form of cancer to make a claim. They are ill and often coping with the emotional as well as the physical effects of the illness and cannot understand why the policy is now worthless. We can point to the policy conditions and the literature but, at the end of the day, the customer thinks they should be covered and feels angry when they find that they are not. Consequently, there is a general mistrust of critical-illness cover even though the industry has paid out over 2bn in claims over the last 20 years. How do we improve our image? Is it just a case of making our literature clearer? Do we need to adapt the current suite of products or is a more fundamental redesign of policies needed? Declining consumer confidence is an issue that the industry must take seriously and yet, as each story of a claim being rejected is printed, another dent is made in consumer confidence, another sale is lost and another adviser moves away from recommending critical-illness cover. Why should an adviser recommend a product to a client if they fear that in the future they will be forced to tell the client that the product will not pay? Our research into the critical-illness market shows that consumers are very confused about the cover they have and are acutely aware of the shortcomings of current products. They can see the obvious attraction of a lump sum in the event of something serious happening to them but equally they are sceptical whether they will receive it. The all-or-nothing approach to payouts, used in most current products, may be part of the problem. Many people are diagnosed with conditions which may not be life-threatening but still mean that they cannot work and so will lose income. All-or-nothing means that many consumers receive nothing and inevitably believe the system is unfair. Twenty years on from the introduction of critical-illness cover to the UK, the product has reached a crossroads. Innovation is seen as a threat to the status quo which will challenge the way we think about this benefit and the way it is manufactured. Recent innovations have not been welcomed by all but are essential to broaden the scope of the cover. Future versions of critical-illness cover must be designed with the customer at the heart of the proposition. It sounds obvious but if consumers feel that the current product does not meet their needs, they will not continue to buy it in the current form. South Africa has seen the emergence of a new type of critical-illness cover which is based on a payment related to the severity of the condition. Is this what consumers want? There is no question that they want more than the current offering. The crucial thing is to restore confidence in what we do. Advisers want to be able to offer a product that suits their clients’ needs. For customers, it is even simpler. They want to know that they will be paid and any provider which finds a way of cracking this conundrum will be on to a winner.