Nick Telfer, protection development manager, VitalityLife
Considering its unique coverage for a number of common conditions, shouldn’t advisers feel compelled to justify why they haven’t recommended Serious Illness Cover, rather than why they have?
If we start from the customer perspective, then it is hard for an adviser to justify not considering Serious Illness Cover as part of a critical illness recommendation to clients. Both have been designed to meet the same customer need: namely, to protect against the financial and emotional impact of a major illness. Yes, they work slightly differently but the key difference is how and when they pay out.
"So rather than considering Serious Illness Cover to be different to Critical Illness Cover we need to see them as being part of a spectrum of solutions for advisers looking to satisfy this customer need."
Of course, the main reason for taking out any type of insurance is that it is there for you when you need it - if it isn't, then what is the point of it? Obviously, affordability also needs to be a fundamental consideration. From a protection advisers' perspective, the aim is therefore to strike a balance between the breadth of cover and a price which meets the client's budget. In simple terms this is the definition of value.
As part of this, the likelihood of the plan paying out when the adviser and their client expects it to is key. Recommending a product with a higher propensity to pay out better not only protects the customer and minimises the potential for a poor outcome for the client. It also reduces the likelihood of an adviser needing to have the worst possible conversation with a client - to tell them they aren't covered when the thought they were.
More chance of a claim
The key advantage of Serious Illness Cover over critical illness cover is that there is a far higher likelihood of the planholder suffering a claimable condition1. It should therefore be considered when looking to protect a customer against the risk of serious or critical illness in our view. After all it reduces the risk of that worst possible conversation and an ensuing complaint.
This greater likelihood is because it covers significantly more conditions than any other provider2. In fact, our Serious Illness Cover includes 38 unique conditions and Serious Illness Cover Plus includes 613. But let's not get hung up on these numbers. To show how important that might be, in 2019 over 1 in 12 of our claims were for conditions that are unique to Vitality4. Three of the most common unique conditions claimed for were:
- Pulmonary Embolisms: a blocked blood vessel in the lung - around 28,000 people were hospitalised in 20115
- Inflammatory Bowel Disease (without the need for surgery): the name for conditions such as Ulcerative Colitis and Crohns Disease - affects around 300,000 people in the UK6
- Surgery for Cardiac Arrythmia: abnormal heart rhythm - affects around two million people per year in the UK7 .
To put these into context Motor Neurone Disease, a dreadful condition is thought to affect around 5,000 people in the UK8.
As the above shows these are common conditions that have a real financial and emotional impact on people, and it wouldn't be unreasonable for a typical client diagnosed with one of these to consider them serious or critical illnesses. If that's the case they would be calling you, their adviser, expecting a pay out but they would only get one if you had recommended Vitality Serious Illness Cover.
And what about coronavirus?
Another condition which customers might reasonably consider to be serious or critical is COVID-19. No critical or serious illness plan specifically covers COVID-19 because those diagnosed tend to fully recover within a short period of time. As we all know some people are less fortunate and need to be treated in hospital, often in intensive care. For these people other conditions are more likely to arise such as Pulmonary Embolism and Acute Kidney Injury. As an example, it is estimated that between 20% and 40% of patients admitted to ICU with COVID-19 developed Acute Kidney Injury9 with Kidney Replacement Therapy (Dialysis) often needed. Uniquely, Vitality Serious Illness Cover pays out from 24 hours of dialysis under its Acute Renal Dialysis definition, while other insurers require end stage Kidney Failure in order to pay out.
Adjectives such as serious or critical have different meanings to different people so careful positioning is crucial. When it comes to protecting customers against the financial and emotional impact of a serious or critical illness, we need to be mindful of their expectations.
So next time you are speaking to a client about serious or critical illness think Vitality Serious Illness Cover - it better protects your customer and better protects your advice.
Find more out how Serious Illness Cover could benefit your client.
This post was funded by Vitality
Sources:
1. Defaqto verified Competitor Comparisons, Apr 2021.
2. Defaqto verified Competitor Comparisons, Apr 2021
3. Vitality Illness Comparison Tool, independently verified by Defaqto, April 2021
4. Vitality Claims and Benefits Report, Jun 2020
5. https://statistics.blf.org.uk/pulmonary-embolism.
6. https://www.calprotectin.co.uk/about-calprotectin/inflammatory-bowel-disease-ibd
7. https://www.nhs.uk/conditions/arrhythmia/
8. https://www.nice.org.uk/guidance/qs126/documents/briefing-paper
9. https://www.magonlinelibrary.com/doi/full/10.12968/hmed.2020.0574
A version of this article originally appeared on Vitality Insights Hub
