"This is the first major change in policy design for some years and we anticipate that it will have a significant impact on the market going forward."
Zurich will now allow advisers to craft individual solutions for every customer, with packages of cover that can be added or removed. This will give policyholders comprehensive protection fit for different stages of life. The insurer has also de-coupled child cover from adult cover and introduced a market-first optional pregnancy and early childhood cover, which can be added or removed for those planning to start a family.
This new proposition includes three levels of cover. The most affordable ‘critical illness’ is designed for those who want quality cover for the most claimed conditions at a competitive price. This level offers revised and improved definitions from Zurich’s previous standard package for brain injury, cardiomyopathy, pulmonary hypertension and less advanced cancer of the prostate. It also includes updated cancer, heart attack and dementia cover in line with the Association of British Insurers guidelines.
For clients looking for more comprehensive cover at a competitive price, Zurich has designed ‘critical illness enhanced’, formerly known as ‘Select’. This policy now includes cover for all neurodegenerative conditions, all bowel diseases, accidental hospitalisation, permanent pacemaker insertion and severe sepsis. It also includes improved cover for a range of conditions including mental illness, coronary angioplasty and drug-resistant epilepsy.
Above this level of cover sits Zurich’s entirely new ‘critical illness enhanced+’, designed for clients who want market-leading cover and pay-out levels. The maximum payout for additional payment conditions at this level has been doubled from £25k to £50k. It also includes additional benefits providing a maximum payout of £200k for severe conditions, while the maximum age for the uplift benefit has been raised from 50 to 55.
For parents, there is the option to add cover for children onto Zurich’s personal protection policy, including life cover. This comes in two forms: ‘children’s cover’ and ‘children’s enhanced cover.’
‘Children’s cover’ includes children’s critical illness that pays the same sum for all named conditions and pays for child death. It also now includes a hospital stay benefit which provides a contribution to the out-of-pocket expenses during a prolonged stay in hospital. This option can be added or removed from adult cover at any time so parents/guardians are free to choose a level of cover that suits their needs and budget, ranging from £10k to £100k.
For those who want Zurich’s most comprehensive cover, policyholders have the option to add ‘children’s enhanced cover’ This improves on ‘children’s cover’ by providing the same critical illness cover for children as Zurich’s ‘critical illness enhanced’ option as well as including a new child permanent dependence benefit, which pays out if the child is rendered unable to permanently live independently.
Finally, policyholders can now add an extra layer of ‘pregnancy and early childhood cover’ to their policy. This serves as an optional short-term solution for those planning to have children in the future as it can be removed once it’s no longer needed. This cover includes critical illness protection for cerebral palsy, craniosynostosis, cystic fibrosis, Down’s syndrome, Edward’s syndrome, hydrocephalus, muscular dystrophy, osteogenesis imperfecta, Patau syndrome, and spina bifida. This can be added at any point during the policy term and carries improved cover for pregnancy complications including stillbirths, birth defects and late-stage miscarriage. In a market-first, this cover also includes a contribution of £50 per night towards the unexpected costs of hospital stays due to premature births.
Commenting on this enhanced proposition, Louise Colley, director of retail protection at Zurich, has said:
“Our enhanced approach to critical illness will allow advisers to offer crafted cover to customers at any stage in life. The FCA’s new Consumer Duty regime focuses the mind on creating solutions that meet customers’ needs more than ever before, rather than off-the-shelf products that may not always be suitable.
“With the ability for customers to add and remove elements of cover throughout the life of the policy, this is the only critical illness product that policyholders will ever need. The peace of mind this will offer customers, combined with the simplicity it offers to advisers, makes this an offering we are incredibly proud to share with the market.”
Praising Zurich’s decision to “completely disregard the standard critical illness template,” CIExpert has deemed this proposition a “fresh blueprint.”
Highlighting the insurer’s focus on clients of “all ages, needs and budgets,” CIExpert said that “being able to add to the cover or to discard those elements of the plan that are no longer required far more accurately reflects the client’s needs both now and in the future.”
The critical illness comparison service felt that “whilst many advisers and consumers focus on simplicity, [and] many others are focused on choice, quality and flexibility,” Zurich has catered to all of these differing needs and budgets with its innovative modular design.
“This is the first major change in policy design for some years and we anticipate that it will have a significant impact on the market going forward,” CIExpert concluded.