We're still standing, but we need to walk

Changes to critical illness definitions by the Association of British Insurers are a year old. So what has happened over the last 12 months? Well, some 150,000 people will have had a stroke, 10,000 of whom will be under retirement age, according to the Stroke Association. Also, more than 275,000 will have had a heart attack, according to BBC Online, and more than 250,000 people will have been diagnosed with cancer, according to Cancer Research UK.

One large provider paid nearly £50m in critical illness claims last year. As an industry we have paid hundreds of millions more. It is important to stress this because too often we forget to focus on the massive difference we make to people’s lives in paying out claims.

In the last 12 months I have had personal cause to pay extensive visits to a stroke rehabilitation ward. My sense before going was that strokes only happened to older people. The elderly are certainly more at risk, but the 29-year-old mother of two on the ward I was visiting was clear evidence that a stroke can happen to anyone. It happens to more than a 1000 people under 30 each year.

People can and do recover from a stroke but many are left with long-standing impairments, with restricted mobility and limited physical dexterity. There are catalogues of products that have been specifically designed to make life easier, but inevitably they all come with a price tag attached. One key decision is where the stroke victim will live on leaving hospital or the rehab unit.

For many, staying in the existing home, close to supportive friends and neighbours, perhaps with modifications such as a chair lift, is the right choice. A critical illness pay out can help to make that possible.

So what we do is important and does make a difference to thousands of lives. The product may not be perfect, but we have seen a series of initiatives in the last 12 months that should instil greater confidence in advisers and customers alike. We have seen changes to definitions, changes to ABI guidelines for non-disclosure cases and a range of new product developments.

The changes made to critical illness definitions in April 2007 were positive ones, both in terms of the attempt to provide greater clarity for consumers, and an element of future-proofing. Key changes included:

• the introduction of a generic description of critical illness claims to improve customer understanding;

• the use of more descriptive headings to improve clarity about what is, and is not, covered;

• changes to the model critical illness definitions to help reduce the need for future changes and to improve consistency; and

• extending the number of conditions for which a model definition is available to improve clarity and make it easier for customers to compare policies.

These changes are all positive, although not everyone will have noticed them.

Earlier this year, one provider conducted telephone research with more than 500 customers to test their understanding of their plan in terms of what it does and does not cover and their understanding of different options.