"This theme was echoed in CIExpert’s 'Critical Thinking 2024' Report […] after consulting with the team at CIExpert to assess the level of positive impact these changes would have on consumer outcomes, we’re delighted to be able to introduce them for new customers with immediate effect."
- Jacqui Gillies, Marketing & Proposition Director at Guardian
Guardian Financial Services (Guardian) will now pay 50% of the cover amount up to a maximum of £50k – increasing from 25% - for new customers. The exception to this is for low-risk non-melanoma cancer, which remains at 10% of the cover amount up to the same maximum.
Additional payouts are designed to give customers the financial ability to make lifestyle changes or help fund additional treatments that they may need if they’re diagnosed with a critical illness or injury that meets one of the additional payout definitions.
These additional payouts don’t impact the policyholder’s ability to make a claim for a full payout in the future and can be payable more than once in the policyholder’s lifetime – but not for the same condition twice. The exception is carcinoma in situ which can be claimed multiple times so long as the site of each carcinoma in situ is different.
As previously highlighted, this product change only applies to quotes and applications for Guardian’s Critical Illness (CI) and Combined Life & CI from today onwards. Since this isn’t a definition change - as required to fall within the scope of Guardian’s Cover Upgrade Promise - this product change doesn’t apply to Guardian’s existing policyholders.
“Additional payouts offer much needed financial breathing space and the ability to make lifestyle modifications or help fund additional treatment to those people who’re diagnosed with something critical, but not critical enough to meet a full payout definition,” explained Jacqui Gillies, Marketing & Proposition Director at Guardian.
She said: “We know advisers like our crystal-clear definitions and our approach to claims, however, some partners were telling us that their customers would value a higher additional payout amount. We’ve listened to that feedback and it’s why we’ve announced this change today.”
Responding to this decision, Alan Lakey, Director at CIExpert, said its 'Critical Thinking 2024' Report showed that “the majority didn’t recognise that additional payment conditions were included in most plans; 81% of consumers didn’t think it was possible to make multiple claims for either adults or their children for less critical conditions.”
“Interestingly once that was explained, 36% said they’d be more likely to consider CIC in the future, which rose to 70% of Gen Z. This indicates that as an industry we too often assume that consumers understand our complex terminology […] you have to wonder how many advisers would recognise the impact of this percentage change,” he added.
“Our comparison analysis takes these payment levels into account, which is particularly important for comparison of decreasing plans, where the amount paid out will vary for each year of the term and requires an accurate reflection of the overall difference in value for the customer.
“This Consumer Duty requirement highlights the importance of advisers explaining the valuable benefits of critical illness plans since it’s unlikely that most consumers would comprehend the difference,” Alan concluded.
