Over the last 18 months the critical illness market has had quite a shake up. Since Aviva launched their Upgraded product we have seen product updates from Royal London, Legal & General (twice), VitalityLife and AIG not to mention a new entrant to the market with Guardian. Overwhelmingly the changes have been positive for consumers and today Old Mutual Wealth are the latest insurer to offer improvements to their plan as well as a new feature not seen before.
The upgrade sees changes to 21 existing definitions and the addition of 18 new definitions (5 full benefit and 13 partial payment). It is noticeable that wording used is much more consumer friendly. A plain English guide to critical illness definitions is also available explaining what each condition or treatment is.
FTRC use a panel of medical practitioners to review and rate insurer critical illness wordings. The chair of this panel, Dr Adam Hazell of Cooper Health in Harley Street was particularly complimentary of the new wordings:
“Old Mutual Wealth has taken significant steps to increase coverage in their new critical illness wordings. This has clearly been targeted at the medical conditions that have the highest incidence rates and are more likely to require a claim. This includes the more common heart and neurological conditions, such as heart attack, multiple sclerosis, Parkinson’s disease and motor neurone disease. In addition, coverage on certain surgical procedures has also risen for carotid artery and aortic aneurysm surgery.”
The results of this show that the new Old Mutual Wealth product offers comprehensive cover for adults when compared to others in the market (including the most recent product updates) as can be seen from the graph below.
To produce this analysis, we have used age banded incidence data along with the gender, age and term of the plan to weight each condition based on how likely someone is to suffer from it. 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 rarer. This example is based on male and female thirty-year olds taking out a joint life 25-year policy.
As well as upgrading their adult conditions, Old Mutual Wealth have also added 5 new conditions that are particularly prevalent in childhood. These include; Type 1 diabetes, intensive care benefit, Crohn’s Disease, Cystic Fibrosis and Hydrocephalus.
The results of this again, has made a dramatic impact in our doctors analysis of their children’s critical illness proposition.
To produce this analysis, we have used age banded incidence data along with the gender and age of each child to weight each condition based on how likely someone is to suffer from it (this also includes the adult conditions). Therefore, those conditions that a child is more likely to suffer from have a far greater impact on the overall score than conditions that are rarer. This example is based on male and female child both born today.
The children’s critical illness market has become far more complicated in recent times as a number of insurers have added congenital conditions. These are conditions that are diagnosed either during pregnancy or in the immediate period after birth. For this reason, if a client is not planning on having more (or any) children they should not be considered in any comparative research.
Across the market there are 8 specific congenital conditions offered (see below) and Old Mutual Wealth’s upgrade includes cover for 5.
- Cerebral Palsy
- Down’s Syndrome
- Edwards Syndrome
- Muscular Dystrophy
- Osteogenesis Imperfecta
- Patau Syndrome
- Spina Bifida
The congenital conditions not covered by Old Mutual Wealth are Edwards Syndrome, Osteogenesis Imperfecta and Patau Syndrome which are the three conditions with the lowest incidence. The graph below highlights how this affects our doctors analysis of the condition diagnosed at birth.
As part of the upgrade, Old Mutual Wealth have not follow others such as Guardian and AIG and kept the amount they will pay for their additional conditions at 25% of the sum assured to a maximum of £25,000.
Outside of their critical illness definition upgrades, Old Mutual Wealth have also added a new feature that has not been offered by insurers before. They have called it “First Time Cover” and it gives any child covered under the policy the ability to take out their own critical illness cover without underwriting. The maximum cover that can be taken out by the child is 50% of the parent’s sum assured to a maximum of £25,000 increasing to £50,000 where both parents are on a joint policy or have separate cover. The conversion can only occur within 6 months of the child’s 22nd birthday and is not available if the child has made a claim.
This seems like an excellent step forward in the market as it may enable more younger people to be covered albeit at a relatively low sum assured.
Old Mutual have not gone down the route of optional add-ons instead opting to keep things simpler by including all the upgrades as standard to their plan. For advisers this enables them to compare policies based on one price knowing that everything is included. On the other side of the argument there may be some features such as children’s critical illness that clients will never use but still be paying for.
Overall the upgrade again moves the market forward and provides consumers and advisers with another high quality critical illness plan. OMW should be applauded for thinking outside the box and offering a feature that could help more young people obtain cover if not at least think about protection.