In the first in a series of articles exploring the finer points of critical illness protection, CIExpert's Alan Lakey discusses value judgements.
To advise on critical illness requires a level of awareness regarding the significance of the various conditions and the worth afforded by the multitude of claims definitions. It goes without saying that some plans are more likely to pay out than others and greater knowledge enables value judgements to be made, with the result being a suitable and compliant plan selection.
A good example is low-grade prostate cancer. This is the most common cancer affecting men. Over the past 20 years, there has been a rise in diagnoses due to a greater awareness and the use of PSA testing.
The spread and aggression of the tumour is measured by reference to the Gleason Grading System, which assists in determining what treatment (if any) should be undertaken. Payment for this condition requires a Gleason score of between 2 and 6. A score of 7 and above will trigger a claim under the main cancer definition.
The National Institute of Clinical Excellence (NICE) issued guidance in February 2008 advising that a Gleason score of 6 or below should be considered low risk. It recommended active surveillance or watchful waiting rather than treatment. NICE further recommended prostatectomy and radiotherapy as preferred treatments for Gleason 7 and above, with cryotherapy and ultrasound only being favoured as part of clinical trials.
Active surveillance
The Nice guidance is backed up by information from the British Association of Urological Surgeons, which confirms the majority of prostatectomies are carried out on patients with Gleason scores of 6 and 7.
This naturally impacts on the acceptance of a claim because, apart from PruProtect, the other five companies covering this condition insist on some form of treatment. Of course, NICE guidance is exactly that, and consultants are able to follow their own initiatives.
All treatments carry potential side effects, such as incontinence and erectile dysfunction. It is for this reason that NICE believes active surveillance to be suitable for lower risk sufferers, although it is also true that radical prostatectomy offers a higher likelihood of survival.
While prostatectomy is the main treatment, other treatments are used, with ultrasound being increasingly suggested as a viable alternative. Table 1 highlights the claim requirements of each insurer. PruProtect stands out by requiring only a positive diagnosis, while Aviva also shines by meeting a claim regardless of which treatment is carried out. The figures relevant for advisers show that annually, there are about 40,000 new prostate cancer patients, with 26% affecting those below age 65 (roughly 10,500).
In addition, some 45% of diagnoses impart a Gleason score of 6 or less, providing a relevant figure of about 4,700 for those below age 65. From this, it can be seen that PruProtect would meet a claim for all 4,700 sufferers, regardless of whether they undergo treatment or not.
It is estimated that about 70% of this group will undergo immediate treatment. This is an important statistic because other providers pay out only if and when some form of treatment is undergone, with Aviva not restricting the type of treatment.
The other factor determining the most effective cover is the amount payable. Table 2 highlights PruProtect as potentially the best in this area. While it restricts claims to 25% of the sum assured, it does not impose a cash limit.
Friends Life and LV= are next best with payments up to £25,000. For plans with a sum assured at or below £100,000, both providers would pay the same 25% as PruProtect. But when it comes to higher sums assured, PruProtect gains a distinct advantage.
PruProtect apart, the other five providers pay a claim without it affecting the sum assured. With PruProtect, this is dependent on whether the minimum protected account option has been taken up.
Alan Lakey is director of CIExpert Ltd
Table 1: Claim requirements
Table 2: Amount payable
