"The CIExpert Adviser Watch highlights the breadth of views and behaviours among advisers when it comes to children and critical illness cover. The vast majority appreciate the value of it, yet there appears to be some lack of awareness and understanding regarding the implications of leaving it until after birth. "
- Alan Lakey, CIExpert director
According to data and analysis from Census 2021, there were 2,597 stillbirths in England and Wales in 2021, which was a 9.5% increase compared 2020 and similar to the 2,522 stillbirths seen pre-coronavirus (COVID-19) in 2019.
However, despite this 9.5% increase in stillbirths, less than half of advisers suggest that a client should put children’s critical illness cover in place before their child is born.
Furthermore, CIExpert’s Adviser Watch found that almost a fifth of advisers (19%) would “always” and a further 36% would “sometimes” recommend an adult-only policy even if their client thought they would have children in the future.
CIExpert claims this raises questions as to whether they will advise their clients to let them know when an addition to the family is intended and how likely it is that they will be given the opportunity to take advantage of cover for pregnancy complications and congenital conditions that occur prior to or during birth.
Although some advisers believe it is better to put cover in place in advance, this viewpoint represents only a quarter (23%) of advisers. These advisers said that they would “never” recommend an adult-only policy if their client thought they would have children in the future.
In response to these findings, CIExpert is urging more advisers to consider the benefits of adding children’s CIC to a policy even before a child is conceived. This warning is especially founded after a poll taken by over 260 advisers, ranging from protection advisers to mortgage intermediaries, found that 42% were unaware that most congenital conditions in children are diagnosed at birth. This means that if children are not added to a CIC policy until after birth, they may not be covered for these conditions.
According to CIExpert, some policies cover significantly more congenital conditions than others, ranging from Cystic Fibrosis, Muscular Dystrophy, and Cerebral Palsy. However, only 51% of advisers felt that the range of conditions always influenced their policy recommendation.
A fifth of advisers (18%) claimed that the range of conditions covered has little or no influence on their client recommendations.
Commenting on these findings, Alan Lakey, CIExpert director, has said:
“While in recent years we have seen many insurers adding in a host of child-specific conditions to their critical illness cover - often congenital conditions - we have also seen a move away from child cover being automatically included as a number of insurers now offer it as a paid-for option.
“This has been known to raise compliance concerns, where a couple doesn’t yet have children, that they may be insuring a future event that may not occur but if this is followed and it’s left until after birth, then the child will not be covered for the various congenital conditions that are generally diagnosed at birth and any pregnancy complications or a still birth may not be covered.”
Paul Reed, Vita director, commented:
“As one of the most claimed on reasons for Critical Illness Cover, it’s really important that we take Children’s CI seriously. Many insurers include this as standard when taking a policy, others as a payable extra.
“This research demonstrates that the majority of the Adviser community agrees with this and would encourage their clients to take out cover if they have, or are considering having, children. In those instances where Children’s CI may not be applicable, it highlights the importance of staying in regular contact with clients and reviewing their needs as the years go by.
“Rather than leaving it to the client to ‘let them know’ about a change in family setup, the Consumer Duty will help ensure firms have a clear process in place for continuously reviewing client’s needs – this will inevitably uncover those changing situations where new children are involved and the need to ‘add’ Children’s CI onto policies.
“Some insurers allow this addition in a non-underwritten bolt on already – the more that can offer this flexible facility rather than an overhaul of their current arrangements the better.”