The Association of British Insurers should have maintained core and additional categories for critical-illness conditions rather than group them together under its standard definitions, says Defaqto protection principal consultant Nick Telfer.
Speaking at the Osney Media Protection Summit in London last week, Telfer said many advisers and consumers are now unclear as to which conditions are most valuable.
He said this has led to advisers recommending products based on the number of conditions they cover although many of the obscure or even high-profile illnesses have small incidence rates. This has come at the expense of ranking other product features.
Telfer said: “Our industry plays on fear. We have 44 different conditions which distorts the message that critical illness is a value proposition. The product with 44 conditions looks 11 times better than the product with four conditions but this is obviously not the case.
“Providers are guilty of making advisers fear they will get sued in the future if they do not recommend the product with 44 conditions.”
He said statistics show that cancer, heart attack, stroke, total permanent disability and multiple sclerosis account for the vast majority of claims but many advisers are not aware of this. He said advisers would recommend quality products more confidently if these conditions were referred to as core and other conditions were labelled as additional.