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Tough conditions

Lifesearch’s Emma Thomson says transparent quality will help advisers pick the right CI cover

Aviva is the latest provider to increase the number of critical illnesses covered but at the same time made it very clear they do not believe in playing the numbers game.

This is one game though that only the unpopular kid in the corner dares not play and, whatever Aviva says, they are not that kid. But while providers jostle in the playground trying to be top when it comes to conditions offered, it is becoming increasingly difficult for advisers to know which series of conditions is really going to give customers the best chance of claiming.

Unless one has a customer who just wants the cheapest plan on offer, it is not as simple as looking at who offers the most conditions as providers have chosen to offer different ones. How, therefore, is an adviser supposed to determine accurately whether provider A with 36 conditions is a better bet than provider B with the same or even fewer conditions, some of which seem more likely to be claimed on than provider A’s extra ones? If provider A is recommended but the client is later diagnosed with something they could have claimed for if they had been recommended provider B, where does that leave things?

The difficulty is that critical- illness products have become more complex as providers try to outdo each other by adding on more and more conditions without making clear the relative worth of each condition. Don’t get me wrong, I fully support developing the product to enable more claims to be made but with providers choosing to cover different conditions differently, it does pose problems when deciding which is best.

What would really help both is for providers to supply information about the probability of being diagnosed with each condition covered. It will make the process much easier for advisers and customers who are not medical experts. It is not as simple as looking at statistics for the overall UK population because the insured population will be slightly different but the data must already have been analysed by each insurer to determine the likelihood of claims being made, so it should therefore be available.

If this became standard practice across the board, it would make a real difference to the quality of advisers’ recommendations and will also halt the reliance on price and number of conditions. I know many providers are already growing tired of the numbers game but without key information about the value of each condition, advisers naturally use those who on paper have more to offer. Perhaps it is the providers such as Aviva which are already growing weary who should take the lead here to demonstrate that their plans really do offer great value.

ABI+ conditions, reductions for exclusions and other initiatives that add value to the customer are all good moves. Let’s play a new game that really places transparent quality above quantity as that is far more cool.

Emma Thomson is head of life office relations at Lifesearch

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Providing the the probability of being diagnosed with each condition covered would be relatively easy to do. This would need to be done on an age banded and gender specific basis, and perhaps also for smoking status.

    I would suggest that this should be done centrally, perhaps under auspices of ABI, to ensure consistency of approach, thus avoiding much of the game playing that has occurred around publishing of claims statistics.

    Any differences between insurers would be minor. For non ABI or ABI plus conditions insurers could provide the data on the same basis.

    The only other complication is the overlap between these conditions and TPD e.g. blindness and deafness would be certain TPD claims if they were not already specifically covered. But lets not make this an obstacle to what is a good idea that could provide greater insight and understanding for both intermediaries and consumers alike.

    Sounds like great material for a new campaign Emma/Tracey.

  2. Figures on the likelihood of diagnosis of certain medical conditions would not necessarily tally with the medical condition meeting the life office’s definition of a valid claim.
    Number of definitions covered is important; but uch greater value can be gleaned for the CIC provider’s claim statistics. Additionally, take a look at the Defaqto rating.

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