The widening critical illness protection gap will only get worse but there will be no easy answer, reinsurer RGA has said.
Peter Barrett, international head of claims for RGA, speaking at a break out session at the reinsurer's Success By Design conference yesterday, said definitions-based cover needed to be fully explained to consumers.
He said to delegates: "This gap is not a new problem and is something that has been around for a long time. It needs to be about trying to make it clear to people that we do not cover all cancers or heart attacks, for example.
"If you get to claims stage and you are told that your heart attack is not severe enough to get anything then people may have a problem with that. This problem will not go away it will just get worse."
He added, in the short presentation before Q&A, that developing troponin tests is increasing the number of people diagnosed with heart attacks and that the lists of cancers grow each time the definition is reworked.
"What can we do about it? It is not easy," Barrett said.
"The more cover the higher the premium and then people do not want to pay. There is no magic answer to this."
He said two basic levels of cover that were easy to understand could be one way to go.
Katya Maclean, head of protection proposition at Lloyds Banking Group, asked the panel if income protection-type products would begin to replace critical illness cover; given the speed of medical advancements and expected increase in declined CI claims as the gap widened.
She said: "The medical definition of heart attack has moved so far away from what people understand they have cover for."
Barrett said critical illness will not cease to exist and income protection was not a straight forward and simple product to suggest it could be a replacement.
He added it was important to remember critical illness had been a leader through the recent troubled times for the industry.
Julie Yates, senior claims assessor at Capita and attendee, said to the floor: "We need to make sure people do not see heart attack and automatically assume something without realising there is s definition to go with it.
"There needs to be explaination before we get to the claims point where all the evidence has been collected and gathered and then we have to say that actually it is not viable. Perhaps customers need reminding of the definition."
Barrett said repeating definitions at the point of claims was too late and reiterated that there a form of payments to cover different levels could be a good way to tackle the issue.
