Under TCF regulations, advisers are required to look at their client's financial wellbeing and needs. With this in mind, what prominence should cash plans be given, and should they ever be at the forefront of a client's requirements.
Phil Jeynes, Direct Life and Pensions
When assessing the use of cash plans it is impossible to avoid comparisons with Private Medical Insurance (PMI) and, for me, the cash plan would always be second best due to the maximum limits and exclusions which most plans carry.
The appeal to a client would undoubtedly be the fact that no medical underwriting is needed when affecting a cash plan, and so for some this would be a cost effective way of getting cover for unexpected medical problems.
However, pre-existing conditions would be excluded and therefore the usefulness of the plan would be impaired.
The reason most clients would be drawn to the concept of a cash plan would be the thought of a serious illness or injury causing them financial difficulty. If this is the case then PMI or indeed Income Protection (IP) should be a higher priority, since there are no maximum payout amounts or treatment limitations; an IP claim could theoretically provide income to a client right through to their retirement age, and PMI should ensure that whatever treatments or procedures are needed are carried out to the full, as opposed to ceasing at a pre-determined limit.
Having said that, cash plans should be a consideration – particularly for clients or employers where budget is a problem, and there are some good innovations in this part of the market such as the new National Friendly product which changes the way limits to payouts are applied by setting an annual ‘pot’ for claims.
Jack Briggs, Simplyhealth
Cash plans are a great solution for clients looking to help their employees budget for the cost of their everyday healthcare needs such as visits to the dentist, purchasing new glasses or going to the physiotherapist.
They do not seek to replace private medical insurance, but rather provide an opportunity to extend cover to all employees, in cases where only more senior employees have received healthcare provision. Also, it is a plan that clients may not be aware of and would benefit hearing about from their adviser, particularly if they are new to health and wellbeing programmes or want to introduce an employee benefit, at little cost to the company.
A company paid cash plan starts from as little as £1 per employee per week. Not only does this benefit the employee, but the employer alike, as cash plans can help address a number of workplace issues including stress, musculoskeletal problems and ‘screen fatigue’ caused by persistent computer use.
Unlike private medical insurance no examination or GP referral is required to join a cash plan and at Simplyhealth, claims are usually turned around within a few days. There is also the option to include partners and dependants, with up to four resident children to the age of 18 covered for free.
Advisers that have their client’s financial wellbeing and interests at heart should present cash plans as a viable option. Stand alone or as part of a package, these plans offer provision for routine health needs that other forms of insurance do not and more importantly, at an affordable cost.
Mike Izzard, Premier Choice Healthcare
At Premier Choice Healthcare, everyone is trained to ensure that we will always put the interests of our customers at the forefront of our business culture to ensure we treat them fairly.
What prominence cash plans should be given depends on what areas of need and priority are established due to a comprehensive fact find being carried out. This can establish the customer’s financial position, their objectives and what they expect to achieve from the product. It can also enable products to be designed correctly in a manner that ensures that the service and product meets the customer’s needs.
So the agreed objectives from the fact find are set out and collated into a concise, clear and easily understood report for the customer that explains the options that are available to them.
From this report, if a customer then decided that a cash plan was the right product for themselves and their staff and the most cost effective benefit that they can put in place, then we must endeavour to ensure that the customer is provided with clear information, and is kept appropriately informed before, during and after the point of sale.
So in my view, as long as the adviser carries out the fact finding mission correctly, and the customer clearly understands and agrees that a cash plan is right for them and their staff, then ‘YES’ a cash plan should definitely be at the forefront of ‘THIS’ client’s requirements.
Ian Talbot, National Friendly
The ability to understand a client’s financial needs and provide products that meet their requirements is fundamental to being an ethical and successful financial adviser.
Feedback from the advisers that we work with indicates that value for money, flexibility, and relevant, applicable, and useable benefits are the most important factors when looking for health-related financial products.
With this in mind, we believe that cash plans have a role to play. A lower cost alternative to comprehensive private medical insurance, they offer ongoing help towards the cost of everyday essential health treatments.
Absence from work can be stressful for both the employer and the employee. Good corporate advisers will know that employers are looking to ensure a speedy return to work for employees and access to healthcare through cash plans can really help.
Traditionally, many cash plans offer a limited amount of money towards an extensive range of treatments and may have been criticised that the reimbursement they offer only provides small contributions towards a wide range of healthcare treatments that many will never use.
National Friendly’s One Fund gives customers one pot of money that they can choose to spend across a selection of core treatments. By giving customers the choice, we have provided the ultimate in flexibility and the opportunity to benefit from higher cover on the treatments that they use most.
We feel that by providing products that offer exceptional value and flexibility, we are really helping advisers to meet their TCF obligations.
