Zurich and HSBC have both brought out hybrid criticalillness insurance products.
The new protection plans are designed to provide critical-illness cover, term insurance and income protection, with stripped-down underwriting processes meaning that applications can be completed in around 15 minutes.
Two products from Zurich – a level protection plan and decreasing mortgage cover with an integrated income protection option – will pay out a lump sum in the event of death, terminal illness or critical illness, or an income if the policyholder cannot carry out their own occupation.
The income protection element, which is designed to cover mortgage repayments, will stop paying out in the event of a lump-sum payment for terminal or critical illness. A comprehensive income protection policy would continue to pay out but Zurich’s plan is around 30 per cent cheaper.
CBK principal Peter Chadborn says: “Zurich has identified a gap in the market. This product will appeal to mortgage consumers who recognise that they need life cover, income protection and critical illness but cannot afford a bespoke package.”
HSBC’s new product, LifeChoices, has four elements comprising term insurance with terminal illness included, accident and sickness benefit, stripped-down critical illness with only five conditions and unemployment cover . The elements can be mixed and matched to provide the desired level of cover.
Lifesearch head of protection strategy Kevin Carr says: “We like the innovation, like the idea of pitching more than just mortgage payment protection insurance and like the fact that it will get consumers to think about the wider needs of protection. We also like the simplified underwriting.
“But it is still a payment protection insurance product which means there will be pre-existing condition exclusions.”