In our recent COVER 360 research, our adviser- respondents said the children's cover element of critical illness cover is the second least important reason in recommending the product. However, this is a high reason for claim. Why is take-up and interest so low when claims are so high?
Alan Lakey, CIExpert
It’s not a nice subject to sit down with parents and discuss the possibility of their child getting cancer. They don’t want to hear that. I think a lot of advisers skirt over it and they simply say ‘if god forbid something should happen to your child, you will be covered for say £25,000’ and then they go onto something else. They probably don’t give it the importance it’s due.
I would not be surprised to find there are a lot of people out there who do not realise they have it and they haven’t claimed for their children. When you say to someone you’re covered for critical illness, when a lot of people take these plans out, they may not have children and it’s never entered their head they’re covered.
I think using claim statistics is a good focus point for advisers. Take our statistics; while about 65% of all claims are for cancer, over 80% are for children’s cancers such as leukaemia.
And because it’s free, in that it’s not been explicitly charged for, saying something is free, and you don’t have a discount if you don’t have children, is a selling point if approached in the right way.
With the changes recently from Skandia and Friends Life, where they are now covering children from birth instead of from 30 days, it’s in that 30 period where there are more children’s deaths and illnesses. We will see those two companies paying out far more children’s claims than previously.
Richard Sadler, Zurich
In 2012 Zurich paid out on 744 critical illness claims (CI) and 4% (33 claims) of these were for children’s CI. This made children’s CI our fourth most commonly claimed condition, after Cancer (62%), Heart Attack (13%) and Stroke (7%).
The most important feature of a critical illness plan is that it will pay out in the event the main life insured suffers one of the critical illness events. For example, think of a customer buying a CI plan to cover a mortgage - rightly that customer’s first priority will be to ensure the mortgage is covered in the event of their own critical illness.
Most applicants do not even consider whether their plan includes Children Critical illness cover, often because parents will not want to think about the possibility of their children actually needing to claim.
