Protection  

Critical confusion

To enhance the definition, many of the insurers add in some form of surgery. For example Aviva extends the definition with the phrase ‘or requiring invasive surgery’ while several insurers including Ageas, Skandia and Zurich waive the persisting clinical symptoms if the benign brain tumour is surgically removed.

Increasing the number of claims that would qualify for a payment, Friends Life will pay on the removal of part or all of the tumour. While, most generous of all, LV= removes the requirement to have treatment or permanent neurological deficit with persisting clinical symptoms altogether and will make a payment on diagnosis alone.

The breadth of cover available under the simple ABI+ label has the potential for confusion and mis-selling as Alan Lakey, founder of CIExpert explains, “The race to add ABI+ definitions will lead to confusion. Some advisers are simply adding up the number of conditions without reading the small print,” he says. “The use of the ABI+ definition to cover so many variations is dangerous. It is like saying ‘I am a dog’ without explaining what type of dog you are.”

Adding value

Although these variations can make comparing products more difficult, some argue that this supports the importance of an advised sale. Being able to cut through the differences and determine which product offers the best value protection or gives the most generous cover to areas important to a client enables advisers to differentiate their service from that provided through comparison sites. Chris McNab, manager of protection products at LV=, adds, “It is an area where advisers can really demonstrate their value. By pointing out the key differences in definitions they can highlight what is available and the value they add. The variation in ABI+ definitions underlines the importance of reading the full definition.”

He also points to the availability of tools such as CIExpert that help advisers to identify the differences between plans. “Advisers can also look at the claims statistics to have the reassurance that an insurer is paying a high proportion of claims,” he adds.

Common sense

But, while guiding clients through the ABI+ definitions may be a valid way to demonstrate the value of advice, some insurers are also calling for the application of some common sense in the way these definitions are used.

With an insurer able to tweak cover very slightly to be able to use the ABI+ definition as a powerful marketing tool, some insurers would like to see the definition only being applied where there is a material difference in the cover. “An ABI+ definition has to add real benefit to a policyholder,” explains Steve Casey, head of marketing and propositions at Ageas Protect. “We will only add an ABI+ definition where our reinsurer charges us a risk premium due to the increased propensity for claims. We won’t include conditions on our products just to bump up the numbers.”