UnumProvident Elixia 123
Type: Individual critical illness cover
Minimum premium/cover: £10 a month/no minimum
Maximum cover: £2m
Illnesses covered: Category one – cancer - invasive and life
threatening, chronic emphysema, Creutzfeldt Jacob's Disease, heart
attack - major, kidney failure, liver failure, major organ transplant,
stroke - severe, terminal illness caused by any condition in category
two or three. Category two – disabling Alzheimer's disease,
blindness, deafness, HIV infection (in the course of certain
occupations such as the medical profession and the emergency
services), HIV infection (via blood transfusion), loss of independent
existence, loss of limbs, loss of speech, motor neurone disease,
multiple sclerosis, paralysis/paraplegia, Parkinson's disease,
pre-senile dementia, third degree burns. Category three – aorta graft
surgery, angioplasty, balloon valvuloplasty, benign brain tumour,
cancer, coma, coronary artery bypass surgery, heart attack, heart
valve replacement or repair, mastectomy, open heart surgery, severe
head injury, stroke, total permanent disability before age 60.
Minimum-maximum ages: 18 - 70
Charges: Policy fee £4.20 a month
Options: Cover increases on marriage, increase in mortgage or
share of business - lower of £50,000 or 50% of original cover. On
childbirth or adoption - lower of £25,000 or 25%
Commission: Initial 130% of Lautro, renewal 2.5%
Richard Evans, Investment adviser, Johnston Carmichael Financial
Services, Alan Lakey, Partner, Highclere Financial Services, Keith
Lewis, Proprietor, Hartley Greatbatch, Mark Oliver, Proprietor, Oliver
Company's reputation 6.8
Premium rates 5.0
Range of illnesses 7.8
Product literature 7.8
UnumProvident's elixia 123 individual critical illness cover plan
categorises illnesses as life threatening, disabling and traumatic.
Policyholders can choose to have a percentage of benefit under each
of the categories.
Assessing how the plan fits into the market, Lakey says: "It is a brave
and innovative plan that deserves to enjoy a reasonable market
share." Lewis says: " A fresh new concept, although several other
major life offices now have flexible policies." Oliver says: "The plan is
innovative in having a menu of options available, whereas most
companies only offer a full list of critical illnesses within their
contracts." However, Evans is more dismissive. He says: "A fairly
standard plan for the sole purpose of critical illness cover over a fixed
Moving on to client suitability, Oliver says: "I think the contract might
be suitable for clients with specific requirements that do not
encompass the full list of critical illnesses within a contract. This
might be due to specific need or cover being based on what the client
can afford." Lakey says: "One looking for a method of reducing plan
costs. Also, those clients able to rationalise the areas of protection
they require." Evans thinks it would be suitable for any client seeking
critical illness cover and Lewis says: "A wide market, possibly
increasing due to long NHS waiting lists. People may prefer to claim
on such policies rather than depend on the state provision of
Considering the marketing opportunities the plan will provide, Oliver
says: "The plan might fit in on cost, where a client is unwilling to pay
for the full menu of critical illnesses, but is prepared to take reduced
benefit in exchange for a lower premium." Lakey thinks it will prove
popular with clients looking for worthwhile but limited cover at a lower
cost. Evans cannot see any additional opportunities.
The panel next turn to the main useful features and strong points of
the plan. Evans says: "The main feature of the plan is dividing the
illnesses into categories determined by the perceived severity of the
illness." Lakey says: "UnumProvident has jumped the gun by
categorising cancers into higher and lower risk groups. The ABI
critical illness working party will shortly announce its standard
wording which will incorporate such methods." Lewis thinks the
various categories are an interesting concept and should reduce the
cost of such critical illness cover. He adds: "The premiums are very
competitive as expected, since in reality it is almost a standalone
product with a maximum age of 70."
When analysing the range of illnesses covered, Lakey says: "It is a
fairly comprehensive range. Just as importantly, the actual definitions
are of a high quality, a point often lost on the tick-box comparison
articles." Oliver says: "The level of benefit is in range with other major
providers in the market place. All the illnesses I would expect to see
covered have been included." Lewis thinks they are wide ranging
and compare well with whole of life and standalone critical illness
cover products. Evans simply says they are comprehensive.
Commenting on the plan's flexibility, the panel are divided. Evans and
Lewis like the feature of being able to change amounts during the
plan for each category. However, Oliver found nothing above average
in the plan's flexibility. Lakey says: "Not as flexible as Scottish
Provident's range, but this is not necessarily a major drawback.
Increase options are included and this is satisfactory."
The plan's drawbacks come under scrutiny next. Evans says: "There
is a risk in choosing anything less than comprehensive cover. It adds
a further difficult decision when looking at other protection such as
income protection and term assurance. There is no term assurance
or a renewable option." Oliver also does not like the fact that
premiums are reviewable and that life cover cannot be added. He
adds: "When I am writing critical illness policies, I like to write them
on a whole of life, maximum cover basis, giving the client the
opportunity to continue the plan after a certain period. With a whole of
life plan on a maximum cover basis, the premium is expected to
increase after roughly 10 - 12 years, so there are no great surprises.
With a reviewable premium, there is always the thought that it
probably will not increase, but any increase could have a nasty sting
in the tail." Lewis says cover is only to age 70.
The panel are enthusiastic about UnumProvident's reputation. Lakey
says: It is well respected as a protection specialist. This innovation
will build on that reputation." Oliver perceives that UnumProvident is a
protection specialist and Lewis says: "Very competitive in the group
market. Whether this will be transferred to individual products is a
question of time. It is not a well known name in the individual market."
Evans says: It is good but lacking in identity in the individual market
compared to the better known insurers."
When asked which plans they see providing the main competition,
the panel again concurs, mentioning the plans from Zurich, Scottish
Provident, Friends Provident, Norwich Union, Skandia and the yet to
be revealed Scottish Life product.
The panel agree that charges and commission are fair and
Turning to the product literature, Lewis says: "It is very easy literature
to read and understand. Well researched with good colour
presentation. Evans says: "Quite good. Easy enough to read and it
covers the main features well." Lakey says: " It is very explicit, which
this type of product must have." Oliver found the literature very clear
and easy to understand.
To sum up, Lakey says: "An excellent and unique offering which
deserves the consideration of all IFAs." Lewis says: "UnumProvident
is not a well known brand name and the premium cost will decide
greatly the extent of success of the product. Cover limited to age 70
could be a small disadvantage – I prefer guaranteed premium rates.
Also, I can see a major problem in the blame culture, that is, an IFA
recommends one profile and the client is unable to claim."