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Guide to Critical IllnessChris McNab, critical illness product manager at LV, says the information that must be gathered by advisers includes medical history, income information and establishing what existing protection policies a client has.
When recommending critical illness cover to clients, while cost may come into play, Mr McNab says it is important that clients purchase a quality, and comprehensive product.
He says advisers will need to consider what a policy covers, the illness definition, when the policy would pay out and whether the conditions are meaningful for their client.
If your client is a woman then Mr McNab says recommending a product on the basis that it has great prostate cancer cover would, of course, not be appropriate.
A client, for a variety of reasons, may actively seek a policy that covers a particular condition; perhaps they know someone who has suffered with it, for example.
Georgina Shield, senior product manager of insurance at Legal & General, says advisers could weigh up the amount of conditions covered from one provider to the next and base their decision on this.
But she argues the best way for advisers to judge which product best suits their customer is to understand the conditions and definitions offered, and with that then understand the customer need and what conditions and benefits they value the most.
She says independent sites such as Alan Lakey’s CIExpert do not just compare the face of the product, but the in-depth definitions and likelihood of payment.
Using customer details, Ms Shield says they find the product which suits their customers’ need most.
Assessing critical illness plans is not as simple as merely counting conditions, adding up ABI Plus conditions or reading tick-box comparisons notifying what conditions are covered, warns Alan Lakey, director of CIExpert.
Mr Lakey says it is the actual condition wording that determines whether a claim is paid.
Most conditions have a variety of wordings in use that vary greatly in terms of the likelihood of a claim being successful, Mr Lakey points out.
He says this is even more pronounced when comparing current plans with their historic equivalents where the quality of the cancer definition, in particular, may be superior.
A good example, according to Mr Lakey, is benign brain tumour where five distinct wordings are currently used – one pays on diagnosis of a tumour, one pays if the tumour is partially or fully removed by surgery or by radiotherapy/chemotherapy and another definition ignores anything other than full or partial surgical removal.
A fourth insists on full removal by surgery whereas Mr Lakey says the least effective is the ABI model definition that only agrees a claim where permanent neurological deficit is proven.
Mr Lakey says price is but one factor of the advice process but on its own is of little use in arriving at a sound recommendation.
He says claims-paying history is important as is name awareness as this can build client trust.
Also important are some of the additional benefits automatically available such as Best Doctors, Red Arc, Helping Hand or as paid-for options such as buy-back of cover and fracture cover.
But Ben Heffer, insight analyst for life and protection at Defaqto, says the priority for an adviser is to recommend a policy that covers the conditions that give rise to most claims.
Mr Heffer says by all means advisers should choose a policy that has a large number of conditions but he added they should be careful not to pay over the odds for it.
He says: “Many conditions are rare or overlap with other covers.
“Quality definitions are important particularly for cancer and heart attack, but be aware that some ABI Plus definitions may not necessarily give rise to more claims.
“Children’s critical illness cover is an important feature of many policies; some insurers report that as much as 5 per cent of claims are attributable to children’s cover and the serious illness of a child can have a significant impact on the family finances.”
Additional payment for breast cancer and prostate cancer can provide some much needed cash at a difficult time, Mr Heffer says.
He says advisers should always ensure that CI is really what the client needs and warns income protection may be more appropriate.
Steve Payne, managing director of protection at Friends Life, says product literature is a good way of demonstrating why a certain product was recommended to a client, as it can spell out the features of that product, which can then be cross checked with an individual’s needs.