Provider's move to include children's CI receives a mixed industry response
By Peter Carvill
Norwich Union has added children's critical illness (CI) cover to all its existing CI policies.
The provider originally began extending children's CI cover to its policies in August 2003, but the latest development now means that the policies pre-dating this point will have the terms retrospectively applied, with the extensions not only applying to biological offspring, but to adopted and step-children as well.
Andrew Knowles, product development and delivery manager for Norwich Union, said: "We are constantly looking at ways to improve the level of cover for both new and existing customers. CI generally needs some positive press at the moment, so retrospectively adding traumatic head injury in August followed by children's CI in September may help to increase customer confidence in the life insurance industry while at the same time demonstrating that we have the customer, and their families, best interests at heart."
Knowles said he was unsure exactly how many policyholders would be affected. "It is nigh-on-impossible to tell but we will honour any claim that meets the definitions. We don't know how many claims we will receive."
He added: "We will be writing to every customer who bought directly to inform them of this and we will be writing to IFAs to ask them to pass this message on from us."
Reactions within the industry have been mixed with experts praising Norwich Union for its move but saying that such measures should not have had to be added retrospectively.
Roger Edwards, product director at Bright Grey, said: "Children's benefit has been a fairly standard add-on to most CI products sold by IFA providers since the late 80s.
"In fact I would find it difficult to think of another provider that doesn't offer children's benefit as standard on its policies - or who hasn't always done so," he added.
Also commenting on the move, Stephen Edwards, head of protection products at Royal Liver, said he thought Norwich Union was bringing in this cover largely to ward off any possible future bad publicity for the company.
"Maybe Norwich Union is trying to pre-empt a scenario where it gets a children's claim on an old policy from before August 2003 when, at the same time it sold it, all other providers were offering it as standard," he said.
Norwich Union's children's CI cover will provide a benefit of £10,000 or 50% of the sum assured (whichever is lower) for each child on the adult's policy.
