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?
If a child does suffer a critical illness the financial implications can be huge. Access to private medical treatment may help to accelerate an important operation. And often expensive on-going care and rehabilitation will be needed as a result of their illness. The child’s CI benefit can help pay for these costs, leaving the parents one less thing to worry about at a stressful time.
At Zurich, children’s CI is automatically included on all our critical illness policies, and we cover children for all the conditions that adults are covered for.
So even though children’s cover might not the first thing on an adviser’s mind when recommending a CI policy, our customers can rest assured if the unthinkable does happen we will be there to help.
Chris McNab, product manager at LV=
I think advisers do not engage with this due to reluctance to talk about it. It is such an emotive subject and people can be quite protective in terms of even thinking that something is going to happen to their children. This probably makes advisers feel quite uncomfortable.
In addition most people who usually take out CI would normally do so off the back of a trigger event. They would be looking to have a full sum assured to cover their mortgage or they want an adequate amount of cover should something happen to them.
Obviously the main driver is picking the right sum assured and term for the main cover. Children’s cover is an integral part included for no extra cost, but it’s probably not so important to get the benefits across. Some advisers definitely use it as a reason to recommend but it’s more a choice between different providers instead of a main driver for cover.
Advisers should discuss the benefits instead of focussing on ‘should the worst’ happen. It’s about focussing on what the money could be used for. Parents could take some time off work to look after their children.
Around 80% of children’s CI claims tend to be for children’s cancer and a child could be out of full-time education for quite a while undergoing treatment. The cover could be used to pay for private tutoring while they are in hospital or even to take them away on a family holiday.
Steve Casey, Ageas Protect
It’s fair to say that child claims are in the top half a dozen of total critical illness claims. The majority of those child claims are due to cancer and the largest proportion of those cases is specifically due to leukaemia.
However overall, child claims make up a very small proportion of total claims. The disparity between this being a reason for a customer to purchase critical illness insurance and the customer going on to make a subsequent claim for a child’s illness, probably has a lot to do with they way the critical illness products can be sold.
Although the products are developed with the family in mind, an increasing number of protection providers are looking at how they can differentiate themselves in the protection market. Child critical illness insurance is fast becoming one of those ‘added value’ inclusions rather than a key component.
Ageas Protect does not tend to focus on just the number of conditions we cover, but more the quality of the insurance and our added value partnerships, such as Best Doctors (providing customers with a second expert medical opinion) and Winston’s Wish (supporting bereaved children).
We also try to concentrate on the breadth of the coverage within those top tier illnesses namely cancer, stroke and heart attacks. If an adviser is concerned about the quality of the insurance they are considering, Ageas Protect can recommend the independent organisation ‘CI Expert’ to gauge the quality and cover of a critical illness product.
