Providers boost cover and reduce their rates
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Two leading providers within the Royal London Group have boosted their protection ranges with wide-scale rate reductions, improved definitions and increased limits to life cover.
Bright Grey and Scottish Provident have added two new conditions to critical illness cover – accident hospitalisation for 28 days and third degree burns – while the multiple sclerosis definition has been upgraded to ABI+. This means the minimum time requirement for a pay-out to be made is now three months rather than six.
Bright Grey has also increased the limit for cover to £10m, and the maximum age for guaranteed life and CI policies has been raised from 54 to 59.
Scottish Provident has slashed life cover premiums by up to 12 per cent on lower sums assured, such as £150,000, and higher sums assured, more than £250,000, have also seen rate reductions.
It has also cut nearly all its CI premium rates at sums assured of £100,000, £200,000 and £500,000.
Roger Edwards, proposition director for Bright Grey, said: “With so much focus on the gender directive at the moment the importance of life insurance for women has been well signposted. But what about their wider protection needs?
“When you consider that every year in the UK twice as many women than men are diagnosed with multiple sclerosis, it’s a great opportunity to think about critical illness cover at the same time”
Scottish Provident said it would mark its 175th birthday this year by embarking on a campaign to make the public more aware of income protection.
Mark Loydall, director of Leicestershire-based Cambourne Financial Planning, welcomed the changes, particularly the improvement of CI cover for multiple sclerosis.
He said: “In this tough economic climate protection will be viewed as an unnecessary luxury so it’s challenging for advisers in this area right now. But one thing is for certain, people always have much less protection in place than they actually need, if they have any at all.”
Mr Loydall also believed the reductions could start a price war ahead of gender-neutral pricing later this year. He said: “Before the European Union directive on gender comes into play, we could see a lot of providers trying to reduce rates and compete with one another. From our perspective that can only be a good thing.”
When asked if his clients had ever experienced problems with CI policy definitions, he said he could count on “two fingers of one hand” the number of times claims had been turned down by insurers.
He added: “On those occasions there has always been a very good reason. I’ve been in the industry for 20 years and can say that providers are consistently excellent at paying out.”