Over the past 10 years innovation within critical illness (CI) has involved adding new conditions – that are often extremely unlikely to affect anyone – to an already long list of conditions.
Recently, a refocus has seen providers move away from complexity, with simplicity becoming a key trend.
Old Mutual Wealth is the latest insurer to upgrade its CI offering and it is obvious that simplicity has been a key value in its design.
It has focused heavily on the wording of its definitions in order to make them as easy to understand and transparent as possible.
For each definition a plain English explanation is also included; describing the part of the body affected and, most impressively, what is not covered under the definition and why.
Often, insurer attempts at simplifying plans lead to less comprehensive cover for clients. This is most certainly not the case for Old Mutual. The upgrade has seen them broadening cover for high incidence conditions including heart attack, multiple sclerosis, Parkinson’s disease and motor neurone disease, revitalising a plan that was falling behind its competitors.
Children are covered for all of the adult conditions and eight new children-specific conditions.
These include diabetes type-one and Crohn’s disease, as well as cerebral palsy and Down’s syndrome, which have relatively high incidence in newborns.
An extra care benefit has also been added that looks to pay an additional £50,000 to clients suffering from the most severe and life changing conditions to help pay for the care they will undoubtedly need.
Getting younger adults involved with CI has been a long-standing problem for the industry.
Old Mutual’s upgrade has made steps to address this. Children are covered by the plan can take out a critical illness plan underwriting free in the six months preceding their 22nd birthday.
This is a great initiative to make taking out protection easier for the younger adults; however this only addresses a small aspect of the problem.
The bigger issue is that young adults are not engaged with the protection industry and as such Old Mutual should be putting in place a communication strategy to support this initiative specifically targeting the children of parents.
The CI market has become hugely complex over the last 10 years. However, companies like Old Mutual are making strides to simplify their wordings while still providing comprehensive cover.
Adam Higgs is head of research, adviser services at F&TRC
