VitalityLife tailors serious illness cover to later life

In what the provider claimed was a first in the insurance market, VitalityLife has launched ‘Dementia and FrailCare Cover', offered at no extra cost when a customer’s SIC expires.

The cover will continue as a whole of life benefit and VitalityLife will make a severity-based pay out following deterioration of health in later life.

The benefit amount will equal 50 per cent of the member's remaining SIC benefit, with an overall cap of £100,000.

For accelerated life and SIC policies the ‘Dementia and FrailCare Cover’ includes a funeral benefit equal to 10 per cent of a member's remaining life benefit amount, capped at £10,000.

A VitalityLife spokesman said the cover was designed to help customers prepare for frailty and the possibility of dementia in later life, funding costs such as nursing fees and home-support devices.

It is absolutely a step in the right direction for them and will be very much welcomed- hopefully it is the first of many such offerings going forwardRobert Harvey

Herschel Mayers, chief executive of VitalityLife and VitalityInvest, said most people could expect to live longer than previous generations and the increasing prevalence and impact of conditions such as dementia in society cannot be ignored.

He said: "So far, the insurance industry has not done nearly enough to recognise this. That is why we are especially excited to be announcing ‘Dementia and FrailCare Cover’.

"This is a world-first and addresses one of the most significant problems in the protection industry, and society more broadly, by helping people retain their dignity and independence during what can be a vulnerable stage of their life."

Robert Harvey, head of protection advice at Drewberry, said the provision of long-term care insurance was under-addressed. 

He said: "So it is great to see Vitality are stepping in with an extension to its already incredibly comprehensive SIC. 

"Most of these policies are being used to cover someone's mortgage for a term up to state pension age, but until now there has been little to cater for the long-term needs of individuals beyond the life of these policies."

Mr Harvey said while the cover is a welcome addition to the marketplace the one possible drawback is the £100,000 limit, given that the cost of long-term care in the UK is between £30,000 and £40,000 per year according to Money Advice Service.

He added: "However, what Vitality have unveiled here is still a massive positive and will hopefully focus the industry's need on an area that is really under-catered for.

"It is absolutely a step in the right direction for them and will be very much welcomed. Hopefully it is the first of many such offerings going forward."

One of the issues hampering the provision of insurance products for social care has been the lack of a cap on costs.

At the moment the cost of care is theoretically unlimited, meaning it is impossible for any company to put together a product which covers the price of help in later life.

The Dilnot report, published in 2011, originally recommended a cap of £35,000 but this was increased to £72,000 by the coalition government and was supposed to be introduced by April 2016.

But in 2015 the previous government pushed this back to 2020 because it would add £6bn to public sector spending at a "time of consolidation".

Current government policy on a social care cap is expected to be revealed in a green paper, due to be published in the autumn, but Prime Minister Theresa May has promised to set an "absolute limit" on the amount people pay for their care.

The wider Vitality brand has today (16 October) also partnered with Amazon as part of its member rewards programme.

Vitality members will receive a month’s access to Amazon Prime for every 160 Vitality ‘activity points’ earned, which can be achieved by exercising at member gyms or tracking health activity.

The Amazon Prime benefit is expected to come into effect later this month (October 2018) and is part of Vitality’s approach in incentivising members to take a more active role in managing their health.

Unlike other Vitality incentives, the benefit will operate independently of any monthly or weekly period so activity points can be accrued over time.

Neville Koopowitz, chief executive at Vitality, said the Vitality programme was continually evolving in line with emerging research and new technology.

He said: "Not only does the Amazon Prime benefit clearly respond to trends in how consumers are accessing video and music content, but we are confident it will appeal strongly to specific segments of our membership who can benefit from greater engagement in physical activity."

rachel.addison@ft.com