CI cover continues to break new ground

It has paid out £6.7bn in the past eight years, and last year alone £801m was paid out.

CI was dreamt up by Dr Marius Barnard, a pioneering South African surgeon, who was looking to find a way to help his patients who had undergone heart surgery.

Before the development of medical techniques, patients tended to die from heart disease but Dr Barnard’s work gave people an extended life, albeit much inhibited.

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The insurance, initially called dread disease, was unusual at the time as it paid out on the diagnosis of illness rather than on death.

The original policy, brought to market by Crusader Life Insurance, covered four conditions: heart attack, cancer, stroke, and coronary artery surgery. Consequently it was taken up elsewhere.

The product has since evolved to keep pace with medical conditions and has had to adapt as life expectancy has changed.

As life chances improve after a major illness, questions have arisen on whether the policy will pay out.

The product has evolved to include many different types of disease,and advisers have witnessed the introduction of severity-based payments, which pay out less on a less-severe scenario.

Katya Maclean, head of bancassurance enablement and protection for Scottish Widows, said: “Despite the pioneering work done by Dr Barnard over the years and the increasing number of people taking out CI cover, there remains a large number of the UK population who are not covered in the event of the unexpected happening and it is these people that the industry must better engage with.”

Adviser comment

Chris Morgan, marketing manager of Devon-based Unusual Risks Mortgage and Insurance Services, said: “We all know the potential benefits to our clients of both income protection and CI cover.

“It is important that the insurance industry continues to break new ground in regards to the risk groups that they will cover and improve the wide variety of products available in the market place. For example, a decade ago it was unthinkable for people living with HIV to be able get life assurance.

“With the growing variety of insurance products available to the HIV community, I’m left wondering how long it will before income IP and CI cover products will be available to the HIV community”.