Providers need to be mindful of getting stuck in a middle ground when trying to cater for a wide mass market on price-competitive critical illness, Skandia has warned.
Ian Jefferies, head of protection at Skandia UK, said if future CI development was driven by providers looking for volume it would move offerings towards the mass market as opposed to catering for more specific needs.
He said: "I expect providers to continue to be driven by volume. I do not see a problem with companies that want to compete on price. But there is a danger of getting stuck in the middle ground trying to attract and appeal to a wider mass market."
Jefferies said the bulk of critical illness business was and would continue to be sold through advisers, but welcomed the choice D2C basic CI propositions offered the market, such as new entrant Beagle Street.
Mark Hughes, IFA at Mark Hughes and Associates, said in an ideal world everyone would buy Skandia's top-end 56-condition CI plan but stressed that price was a huge factor with clients.
He said: "There are competing aspects when making a financial plan and clients need the option of those products that are cheaper with lighter definitions.
"I would like to see some sort of band or coding system for CI products to make it clearer to clients what sort of cover they are getting, and also to make it better for the adviser to compare more effectively."
He added in the case of Beagle Street CI that some cover was better than nothing but did not trust it to provide the consumer with the outcomes they expected, due to very limiting definitions.
Hughes said CI products needed to be made clearer as opposed to simpler.
