"We need to challenge the misconception that CI is only for people with a mortgage and/or children."
Although figures from the Association of British Insurers (ABI) suggest sales of Critical Illness (CI) policies in 2023 were almost four times higher than a decade ago, the Financial Conduct Authority (FCA) estimates only 10% of adults in the UK have CI in place. Clearly, there’s a job to be done across the industry to address product misconceptions and ensure more consumers have appropriate cover.
There are several reasons as to why it’s important for providers to frequently assess and evolve condition definitions associated with CI products. As medicine evolves, treatments, diagnostic methods, and survival rates for serious medical conditions change.
“What was once life-threatening may now be treatable; CI policies need to adapt to reflect these medical advancements.”
Moreover, the types of ill-health & injury that consumers experience can shift so it’s important that providers update definitions to ensure policies remain relevant. Protection policies are subject to legal frameworks and regulation which might require providers to clarify or update the scope of coverage to avoid ambiguities and unfair exclusions for consumers. As public understanding of medical conditions grows, so do expectations of what should be covered under a CI plan – updating definitions helps providers meet consumer needs.
“In my opinion, one of the primary considerations for advisers selling CI should be premium affordability versus individual circumstances & level of cover required.”
This should go hand-in-hand with clear communication of policy updates, including revised definitions. Providers must ensure that product updates provide fair value, and details are communicated in an accessible format.
Supporting advisers as they discuss the impact of ill-health or injury with customers is crucial. Everyone’s life is unique, and their cover should reflect that. For example, standard CI could be sufficient for some customers, whilst some may prefer, or their needs better suit, enhanced cover.
According to research commissioned by Legal & General (L&G), adults in the UK are reaching traditional life milestones much later in life: buying a house (34 years old), having children (32 years old), and getting married (34 years old).
“These milestones have traditionally served as ‘financial check-ins’ when consumers typically purchase protection products, such as CI, Life Insurance, or Income Protection (IP).”
There is a clear job to be done in communicating the benefits of protection for households at different stages in life. We need to challenge the misconception that CI is only for people with a mortgage and/or children.
