The critical illness market has undergone a transformation recently. Not long ago Aviva started the ball rolling by introducing their standard and upgraded propositions. Since then Royal London, Legal & General, and Vitality to name just three have all introduced enhancements to their main conditions and/or children’s cover.
With a number of providers looking to follow suit in the coming months and the introduction of a new insurer in Guardian. The critical illness market is becoming more competitive than ever.
Following the launch of their children’s critical illness extra proposition, Legal & General is the latest insurer to announce further enhancements to their core proposition.
Significantly, Legal and General are following the path set by others by introducing a standard and enhanced (called CIx) critical illness policy. This Enables them to compete in both the price and quality ends of the market, where traditionally they have been seen as providing predominantly price driven products.
The standard product will now provide cover for 41 conditions with improvements to the existing benign brain tumor, blindness, cardiomyopathy, open heart surgery and Parkinson’s disease definitions. They have also sought to simplify existing definitions by combining the Multiple System Atrophy and progressive supranuclear palsy into one Parkinson’s Plus definition and combining their dementia and Alzheimer’s definitions into Dementia including Alzheimer’s.
The enhanced CIx product will offer an additional 17 conditions which will pay 100% of the sum assured and a further 37 partial payment conditions including the full range of in situ cancers where previously only two were covered.
As can be seen below, our independent doctor’s analysis of critical illness wordings highlight that Legal and General have improved their base product positioning and made a real challenge at the comprehensive side of the market with CIx.
This graph is based on our doctor’s analysis of critical illness conditions where the scores for each individual condition have been weighted in line with UK incidence rates. Therefore, those conditions that a consumer is more likely to suffer from have a far greater impact on the overall score than conditions that are more rare.
Legal and General have also increased their positioning in terms of the amount they pay in a single instance of a claim.
This graph depicts our analysis of the amount each insurer will pay in the event of a single claim. Progressive claims where a client may go on to claim for a second condition or may receive an additional payment due to the severity of their condition increasing is not accounted for. Like the doctors analysis we have weighted each condition in line with UK incidence rates and those conditions that a consumer is more likely to suffer from have a far greater impact on the overall score than conditions that are more rare.
Whilst the enhancements made by Legal and General do not move them above Vitality or Aviva in our doctor’s analysis, it is clear that significant improvements have been made. Any enhancements to critical illness wordings that can increase a client’s ability to claim are always welcome and for that Legal & General should be applauded. There is now more competition in the comprehensive side of the market and unlike previously, Legal & General are now real contenders.