Child CI cover is a common benefit on critical illness products in the UK. In Ireland, regulations allow insurers to take cover relating to children a step further, as Greg Becker expains.
In addition, the Law Commission recognises that elderly long-term care needs may also become something children and even grandchildren may wish to insure.
With a quarter of today’s children projected to live to more than 100, we are about to enter a society where there will be even more generations alive at the same time, and being able to insure in an inter-generational way may become a market for tomorrow.
These types of products have started to emerge in France, for example.
In the UK, funeral plans are increasingly popular, but they relate to only the proposer, whereas in many countries, funeral plans are designed to cover the needs of you, your wife and your dependent children.
These kinds of innovative products could come to our shores as a result of the Law Commission changes and would be a better fit for a family’s needs.
Some traumatic events stand out. A university student was involved in a tragic accident at the beach where his neck was broken, leaving him severely disabled and in a wheelchair.
His parents incurred significant costs to renovate their house and had to remortgage in order to purchase a vehicle that could transport their son.
This legal amendment relating to insurable interest will make it possible to insure children, and parents may be in a position to protect against the eventuality their child becomes a dependent for life.
This may prove to be a real and valuable benefit for parents who may want to stop work to support a child’s long-term care needs.
Many customers blow all their protection spending on a policy paying out on the death of a particular parent. Given that individuals have a limited amount of money to spend on insurance products, should premiums be allocated so claim payments are made in a wide range of unfortunate situations?
Will these legal developments lead to more family oriented products with the whole family covered? Will family funeral plans become the new ‘under 50s’ plan?
Greg Becker is product development actuary at RGA
