Critical illness products are continually evolving worldwide. With this in mind, Greg Becker checks out some interesting developments in Hong Kong.
Companies continuously try to differentiate their offerings, trying to make their proposition better in some way. Many would argue this has just made the customer's job of comparing products even harder, and discerning whether or not a newly added disease is a benefit of value is something that is hard to ascertain.
RGA's Critical Illness (CI) Cards put diseases in context, with the likely incidence rates and claim experience being reported. But this is only one of many dimensions on which policies can be compared.
Some companies have differentiated themselves based on distribution channel and product scope (such as minimum premium, minimum age at entry, joint life option and waiver of premium rider). Some recent developments we have seen include the introduction of tiered benefits and multi-pay cover.
Tiered benefits make sense in that different diseases do have a different financial impact, and to use Unum Elixia's wording, diseases can be either "life threatening, disabling or traumatic". Unum's product was a great example of a product that offered tiered benefits and flexibility. But despite winning many awards, it was pulled from the market in April 2011.
EASTERN PROMISES
In Hong Kong, AIA has launched Executive Care Pro and Multiple Care Pro - two products that try to meet customer critical illness protection needs, and which differentiate themselves from the market.
Executive Care Pro covers 61 diseases with coverage extending to age 100. The premium payment term is particularly innovative, in that a person can select to pay for their lifetime coverage over a shorter term - say, five years - with the coverage extending until 100.
The maximum premium payment term options are structured so that nobody over 80 will pay premiums, even if they take out a policy at a very young age. This fits in well with people who take out products during their working age when they have income to cover premiums and who are not looking to pay premiums in retirement.
Multiple Care Pro is a multi-pay critical illness product, allowing payment of up to five times the sum assured (on different events), with the multi-pay option expiring at age 85.
The diseases have been put into five different groups, and one can claim only once from each group of diseases, although cancer conditions are excluded from this requirement: an individual can claim for cancer three times, as long as there is a delay between the episodes.
