Simplicity has been the primary theme for 2020 and, by the use of wider-ranging umbrella headings, AIG has broadened the scope of its critical illness cover by the inclusion of many rarer conditions that previously were excluded due to not being specifically named.
Its innovative design involves the use of wide-ranging headings rather than a never-ending list of conditions.
As well as making significant rationalisations, AIG has opted for a two-tier approach whereby a high quality ‘enhanced’ policy sits alongside a lower priced ‘core’ offering.
This is best exemplified by the ‘degenerative neurological condition’ clause.
Currently, somebody suffering from a rare but progressive neurological condition has had to rely on loss of independent existence or total permanent disability, assuming it was included.
Until now, insurers have tended to make the full range of adult conditions available within the child cover, albeit at a lower payment level.
AIG has completely separated the two by focusing on those conditions that primarily affect children.
Enabling children’s cover as an option reduces the cost for policyholders without relevant children who, until now, have subsidised those with children.
Furthermore, using fixed sum payments applies a patina of simplicity while adding value, as the child cover will not diminish over the plan life.
With the addition of birth defects cover, the existing pregnancy complications conditions and the £100 per night hospitalisation benefit, the child cover has been raised to a new level.
Correspondingly, within the enhanced adult plan, additional payment conditions are limited to the lower of £35,000 or the full sum insured without using any percentage reduction.
This enhances the value, particularly for decreasing term plans.
CIExpert applauds this revolutionary design, which will delight advisers who focus on quality and will surely be used as a template by competitors.
Alan Lakey is a director at CIExpert