Critical illness (CI) providers need to go back to the drawing board if they want to continue to off...
Critical illness (CI) providers need to go back to the drawing board if they want to continue to offer a viable product that caters to the mass market.
Alun Beynon, head of sales at Scottish Equitable Protect, told delegates at the COVER Protection Forum that the industry and the general public has lost sight of the reason behind the need for CI.
"The industry needs to revisit what critical illness was designed to do," he said. "It was not designed to get people back on their feet, back to work and back on the golf course in no time. Yet this is the consumer expectation."
Beynon dismissed guaranteed CI rates as unsustainable and urged providers to consider the next generation of products.
"The primary focus this far has been on guaranteed rates and there are providers still offering this - and that baffles me. The industry is in danger of missing the point of what critical illness is all about.
"Continuing to offer guar- anteed rates in this environment is untenable, unless you are happy for guarantees to continue to go up. However, it then becomes inaccessible and unaffordable for the mass market," he said.
Beynon welcomed the need for product development but urged providers to heed on the side of caution when considering new products. He said reviewable definitions could lead to a drop in consumer confidence and questioned the practicalities of offering graded benefits. A product that dovetails income protection (IP) with CI was considered the most viable.
"A critical illness and income protection hybrid product is the most credible consideration, but it not without its challenges. Advances in medical science are already blurring the boundaries.
"However, the argument for change is compelling, but careful planning and consideration are needed," he said.
