Shine a spotlight on serious illness cover



A reality of struggling to put food on the table and pay bills is one that would face many people in the UK if ill health struck, and it’s a message that advisers and insurers have tried to relay for years.

But one we’ve struggled to translate into many more people taking out the cover that’s needed. A high-profile spotlight on the issue can certainly help to focus hearts and minds, and engage people to look at their own situation.

Article continues after advert

When thinking about protection most people still focus on the financial impact of death, but we all know a serious illness is what’s more likely to occur during someone’s working life.

The number of critical and serious illness policies taken out still lags far behind those of life cover, with around half as many policies sold, but illness cover should be high on the list of recommendations for clients.

However, when discussing illness cover advisers also need to consider what’s most appropriate and relevant for their clients in a changing world.

We are all living longer and medical advancements mean many conditions are detected sooner and treated more effectively, with survival rates improving as a result.

So illnesses that were previously deemed ‘critical’ might not meet the definition for payment on some policies today. When critical illness policies fail to meet people’s expectations, regardless of whether the decision is technically right or wrong, this can be hugely damaging to the perception of our industry.

While some illnesses may no longer be life threatening, they still have a significant impact on the life of the person suffering from it, which is why we believe severity-based illness cover is a fairer approach to paying claims.

With Serious Illness Cover from VitalityLife policyholders receive a payout that relates to the severity of their condition, of between 5 per cent and 100 per cent of the total sum assured. Clients are 2.5 times more likely to receive a payout with us, and we cover more heart attacks, strokes and cancers than any other insurer.

It may seem that the most important thing to someone taking out an illness policy is that they receive a big payout if a claim is made, but putting all of their money on an all or nothing bet leaves clients in a position where they are more likely to have a claim declined.

A more comprehensive option is to ensure that the cover will pay out when it’s needed, at a level appropriate to the impact of the illness being suffered, and that cover remains in place with the ability to make multiple claims throughout the life of the policy.