Why now is the time for you to review your critical illness cover needs

Why now is the time for you to review your critical illness cover needs

Chris Lloyd

How much critical illness cover do you have? Since the early days of ‘dread disease cover’, more and more high net worth finance clients have added critical illness to their protection portfolio. Offering a lump sum on diagnosis of a range of serious medical problems, this cover offers invaluable protection for millions of households in the UK.

If you haven’t done so in recent years, now is the time to review your critical illness cover. There have been increases in the scope and quality of the cover available and three leading providers have improved their critical illness offering in the last few weeks alone. Keep reading to learn more.

Insurers improve the quality of critical illness cover policies

Critical illness cover is designed to ease your financial pressures by paying a tax-free lump sum if you become seriously ill or totally disabled.
Over the years, the range of illnesses covered under critical illness policies has steadily improved. New standards were introduced by the ABI in 2003 and insurers regularly improve their own product offerings.

Now, Friends Life has become the third insurer in the last month to make improvements to its critical illness product. The policy now covers four new conditions and the insurer has improved three of its critical illness definitions.

Money Marketing reports that ‘the insurer now covers 40 conditions, adding sudden cardiac arrest, pituitary tumour, cerebral arteriovenous malformation (abnormal connections between arteries and veins in the brain) and cerebral aneurysm.’ Sudden cardiac arrest and ulcerative colitis are now enhanced to a ‘full’ payout, meaning that the policy will now pay the full sum assured in the event of diagnosis of either of these two conditions.

Within the last month, Legal & General and Aviva have also improved their critical illness products. Legal & General enhanced its critical illness plan by providing additional cover for low grade prostate cancer and three improved conditions while Aviva improved its offering by covering three new conditions and upgrading five of its illness definitions.

Hugh Wade-Jones, director of high net worth finance specialist and London mortgage broker Enness Private Clients, said: “The range of illnesses covered under the leading critical illness policies and the illness definitions continue to improve. The changes by these three leading providers all enhance the cover on offer and make these products more appealing to clients with large mortgages looking to protect their family or mortgage debt.”

Statistics highlight the benefits of quality critical illness protection. In 2011, the average age of a critical illness claimant with Aegon Scottish Equitable was just 46 years old. And, Scottish Provident paid out an average claim of £82,000 including one high net worth finance payout of £945,000.

Cancer remains the most common cause of critical illness claims with figures from Aviva showing that the illness accounts for 67 per cent of claims. 10 per cent of claims are for heart attacks, while stroke (7 per cent), multiple sclerosis (6 per cent) and benign brain tumour (2 per cent) are the other major reasons for a claim.

Mr Wade-Jones added: “If you have had your policy for several years, now is the time to speak to a high net worth financial advisor to review your critical illness cover. The quality of policies today is likely to be superior to your existing cover and you may well require a different level of protection if your circumstances have changed over the years.”