Aegon announces protection changes to 'modernise' offering

clock • 2 min read

Aegon has announced changes to its individual and group protection offering with changes to definitions and increases in levels of cover and age limits.

While premium prices for its critical illness offering are expected to rise, its income protection premium prices are expected on average to decrease following the changes.

Critical illness has seen changes to the top three conditions for claims, with a simplified heart attack definition removing the need for specified troponin levels.

The need to see 3 continuous months of symptoms for multiple sclerosis has been removed as a result of the changes.

Carcinoma in situ of the breast has been added to replace mastectomy, with 25% of benefit amount over and above the original paid, up to a maximum of £25,000.

For income protection the age limit has been increased from 65 to 70, and for individual policies the sum assured has increased from £130,000 to £150,000.

An income promise has been introduced to protect against a drop in income after the policy has started, and all standard exclusions have been removed.

Aegon has also announced a joint life separation option has been introduced and all Family Income Benefit policies now offer guaranteed rates.

Speaking exclusively to COVER, Dougy Grant, protection director at Aegon UK, said: "The critical illness changes are designed to make it easier for customers to claim, to put less restrictions on some of the definitions."

He said: "As a result of these changes, on critical illness the premiums will rise between one and four percent, depending on the proposition.

"What we have on critical illness, unlike life insurance where mortality rates are improving and there is a general trend for life insurance rates to improve as time goes on, on critical illness morbidity, what you're pay out when people get sick, is increasing.

"People are having more conditions but they're living longer with them, that means that critical illness prices may tend to go the other way.

Grant added: "Income protection rates will come down, this is part of our move to make a bigger splash in the income protection market.

"We recognise we haven't been where we want to be in the past, part of that's around the proposition enhancements and part of that is about the price.

"This set of enhancements will not only respond to changing customer needs, people living longer increasing maximum ages, people having more flexible earnings, people having flexible living arrangements having options on joint life separation, it will also improve the price, the price will be improving by more than 10%."

Grant noted that the amount of premium price variation would vary dependent on other variables such as age and underwriting.

He added: "These changes are about us continuing our strategy, continuing to modernise the proposition to respond to customer needs and also to play to our strengths as an organisation."

Further Reading: 

Aegon pays 98% of life claims

Aegon UK's new life single premiums down 53%

Ellipse announces system changes following adviser feedback

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