Simplicity in policy wordings is easy to achieve if providers cared to try, writes Alan Lakey.
We keep hearing the clarion call for simplicity in insurance policy design, with the attendant implication that this will drive consumer demand. But while simplicity may serve to commoditise products, a belief in product design overcoming apathy and disinterest does not necessarily follow. Conversely, it is reasonable to believe in simplifying products where possible.
With critical illness insurance, the quest for greater simplicity is at odds with the actions of both the product design and the marketing gurus who seem to delight in adding and counting the numbers of conditions and waving the increasingly futile ABI+ flag.
This belief seems to fly in the face of CIExpert’s commercial interests, because the more complex and arcane the product design, the more that advisers will demand the CIExpert tool. However, this clambering up the condition numbers pole must end at some point and a fundamental rethink is required.
Catering for contingencies
Among the tinkerings and additions, we often find that lesser-known conditions are included either within the definition or as a separate condition, examples being Devic’s Disease and the addition of some Parkinsonian Syndromes to the Parkinson’s Disease wording.
Not only is this confusing for advisers and consumers, but it also leads to the view that by specifying conditions rather than outcomes there will still be claims that are rejected, even though the claimant is severely afflicted.
If CIExpert was presented with a fat chequebook and given free rein to design a critical illness plan, it would seek to reduce condition numbers and simplify consumer understanding and, ultimately, the claims process.
Consider the ten conditions named in Table 1. All are neurological conditions where the claim requirement is generally identical in requiring permanent neurological deficit.
Are there other neurological conditions that result in permanent neurological deficit with persisting clinical symptoms? If yes, they should be included; if no, it merely highlights the foolishness of using a plethora of condition wordings when one far simpler definition: ‘Permanent Neurological Deficit resulting in…’ would cater for all such contingencies.
Table 2 lists five heart-related conditions, four of which share the common theme of intrusive surgery. It would not be difficult to contrive a claim definition to encompass all of these and simultaneously include any other surgical treatments that currently fall outside of the individual definitions.
The six neurological conditions in Table 3 all require permanent motor dysfunction, with Multiple Sclerosis additionally covering sensory dysfunction.
Again, an overarching claim definition, such as ‘Permanent motor or sensory dysfunction’ would save the need for scrutiny of the wordings and would encompass those conditions that provide an identical dia
