After a year that saw providers replace face-to-face screenings with virtual services during lockdown, LV’s protection director, Debbie Kennedy, said a focus for providers in 2021 had to be ensuring the flexibility adopted during lockdown is not lost.
Ms Kennedy said: “We need to continue exploring alternatives to traditional routes for seeking medical evidence; it really should be the last resort.
“At LV, we have increased our non-medical limits, trialled virtual screenings, increased automatic decisions at point of sales and applied our underwriter’s judgement where needed to get cover in place swiftly.”
Indeed, some protection advisers have reported delays in obtaining GP reports during the underwriting process, alongside a warning that clients could be left “financially exposed”.
Aviva, for example, also made several changes to underwriting requirements in December, including the non-medical limits at younger ages for life and critical illness cover, by increasing the threshold at which medical evidence is requested.
Rise in cancer claims
LV has predicted a rise in cancer claims in 2021 after experiencing a significant drop due to the impact of lockdown.
In April it recorded a 45 per cent fall in critical illness claims compared to 2019 figures.
Other providers have reported similar falls, with the volume of new critical illness claims received by Aegon between April and September 24 per cent lower than in 2019.
LV’s Ms Kennedy said: “We are likely to see a rise in cancer claims as health services are forced to direct their attention elsewhere.
“When medical screenings resume, we will likely see more cancer cases identified in the advanced stages compared to previous years.
“We have a role to play here too – not just in paying a claim smoothly, but providing that really important human touch, empathy and compassion when it really matters.”
Greater use of technology in client conversations
Ms Kennedy also predicted the use of technology would become more common when discussing protection with clients.
She said: “I see more distributors adopting technology to encourage more meaningful client conversations about the risks clients face.
“I’d highlight our own LV Risk Reality Calculator as an ideal and easy to use example of how tools can power better informed conversations and drive greater take up.”
This year saw another provider, The Exeter, launch a range of resources for advisers to help highlight the benefits of income protection to clients.
The resources include a personalised client report generated by an income risk calculator, showing the income gap a customer could face when their sick pay ends.
Paul Yates, product strategy director at iPipeline, also predicted a “continued focus” on such tools, particularly those that provide clients with greater personalisation and ‘nudges’ to show the individual risks in not taking out protection.
According to LV’s Ms Kennedy, income protection demanded a “higher profile and priority”.
A September survey for the Association of Mortgage Intermediaries found life insurance was the most commonly held protection product at 33 per cent, while 7 per cent held income protection.
chloe.cheung@ft.com
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