Critical Illness  

What policies are best for children's cover?

This article is part of
Guide to family protection

He would like to see standalone income protection that covers children’s illnesses and helps parents taking time off to look after them. 

He says: “Having a plan specifically designed to cover children would be a major advancement.

“This allows clients to make a tailored choice in the cover they are seeking. It also helps where clients already have cover in place and therefore are not over-insuring themselves to get children’s cover.

“Moreover, it would help where, because of underwriting issues, some clients would not be able to get, or would be restricted in getting, cover.”

Mr Webb also believes the industry could be more innovative in the way it could underwrite such standalone income protection policies for children. 

He adds: “I appreciate that trying to apply a similar underwriting ethos for income protection to children would be difficult, but surely in this age, not impossible.”

Range of products

And there are many providers who offer children’s CIC as an add-on, although this can be an “expensive exercise to secure a high level of guaranteed cover for children from more mainstream providers,” says Mr Harvey.

However, he says if having cover for a child is of particular concern, it is worth looking at what is on offer.

Mr Harvey states: “Providers have come up with more creative ways to offer enhanced children’s coverage as riders on adult policies.”

He highlights four particular “more creative” offerings that Drewberry advisers have been looking at (see info box), although these come with a slightly higher price tag than the standard CIC for a parent.

Ease of information

Paul Dalgliesh, head of protection propositions at Aviva UK, comments: “It is reasonably easy to find protection products that cover children’s illnesses. 

“A number of providers not only sell products through intermediaries but also direct to customers.”

Moreover, as Mr Nash adds, providers have done much in recent years to boost the children’s element of policies.

He explains: “There has been much development by providers in terms of coverage of conditions, eligibility age, and number of children covered.

“As a result, the majority of CIC plans now cover children’s illnesses, with some fairly comprehensive cover available from the higher-quality plans in the market.”

Handy hints

Mr Harvey says for advisers looking to minimise the cost for their clients but maximise the potential cover is to arrange individual CI policies for the parents.

He explains: “One way to potentially increase the level of a child’s CIC is for the parents to arrange individual policies rather than joint life coverage.

“This could effectively double up the child’s cover, although it is worth noting that, in many cases, the insurers will limit the overall amount of cover available (£20,000 or £25,000 depending on policy) even when multiple policies are taken out.”