Alan Lakey picks holes in the insurer practice of 'condition counting' in critical illness policies.
I don’t blame marketing departments for latching on to any means of boosting their company’s profile. Where I do draw the line is at any deliberate intent to inflate perception of value within a plan or any suggestion that the extent of its coverage is greater than the reality.
It reminds me of when Royal Liver attempted to impress advisers with its CIC plan Progress, which included Severe Lung Disease and Emphysema (which is a severe lung disease).
The game is called condition counting and it allows a company to parade its product as superior to another because it offers a higher number of critical conditions. It offers lazy or uninformed advisers a means of product selection, which frequently fails when under close scrutiny.
Pleasingly, it seems that some companies are now playing the common-sense game and moving away from what might be viewed as dubious practice.
Last year Old Mutual removed Alzheimer ’s disease from its roster of conditions, recognising that having dementia as a specific condition removed the need to include Alzheimer’s as a condition in its own right.
This is sound thinking, because Alzheimer’s is merely a form of dementia and is inevitably covered by any company that includes dementia.
This logic also applies to those plans that name pre-senile dementia as a condition. Pre-senile dementia is a clinical term that simply means dementia prior to age 65 and, again, is automatically included under the dementia heading.
Some marketeers may argue that the consumer recognises and fears the term Alzheimer’s, and that the condition needs to be shown explicitly.
A better answer would be to rename ‘dementia’ as ‘Alzheimer’s Disease and any other form of dementia’. By using two or three specific conditions, instead of just the one, the insurers are boosting their plan numbers and seeking to apply a gloss that is both misleading and unnecessary.
Friends Life has recently followed Old Mutual’s example, and I trust that the other insurers will alter their plans similarly to reflect reality and not the marketeer’s exaggeration techniques.
Another example of forward thinking comes from Old Mutual and Scottish Widows.
Both include Parkinson Plus Syndromes which is an inclusive heading covering Progressive Supranuclear Palsy, Multiple System Atrophy, Diffuse Lewy Body Disease, Parkinsonism-demetia-amyotrophiclateral Sclerosis Complex and Corticobasal Ganglionic Degeneration.
These are all neurological conditions that involve loss of motor function and muscle degeneration. A further area where progress is needed is the useless ABI+ label.
It seems that minds are being relentlessly exercised towards finding some subtle and barely worthwhile adjustment that can then allow a condition to be described as ABI+.
The foolishness of this label is demonstrated by the wordings for Benign Brain Tumour.
Apart from Bright Grey’s LPP plan, Foresters and NFU Mutual, all other plans offer cover superior to that meted out within the ABI model wording. In effect, all advised plans are ABI+ yet, like Orwell’s animals, some are more equal then others.
This recent move towards simplifying plans while simultaneously expanding their coverage is to be applauded.
While the Sergeant steering group struggles to develop a simple critical illness plan, the market can safely ignore such folly and take the lead in ensuring that plans are easily understood, cover what they say and do not imply they are more comprehensive and all-inclusive than they really are.
Alan Lakey is director of CIEXPERT
