Industry
Bright Grey has announced it is introducing guaranteed rates for critical illness (CI) insurance. From November 15, the Edinburgh-based protection provider will offer fixed rates on both life and CI cover as part of the Bright Grey protection menu. The provider will be backed by XL Re.
Following the company's launch in March 2003, it said its decision to offer reviewable rates only was a direct result of more CI claims being paid than had been anticipated, leading reinsurers to more than double the cost of guaranteed rates.
However, the company's U-turn shows there is still a place for guaranteed CI rates. Commenting on the decision, Mark Locke, communications director at Bright Grey, said: "Initially, we did not want to launch something that would be uncompetitive. However, the reassurance market appears to have settled down and we can now give IFAs the choice between reviewable or guaranteed rates that they have been asking for."
Example premiums now offered for a male, non-smoker, aged 35, earning £100,000 a year for a 25-year term, decreasing lump sum are £24.80 reviewable and £32.43 guaranteed. Using the same criteria, the monthly premium for a female would be £27.54 reviewable and £36.75 guaranteed.
"IFAs have built up a lot of confidence in our reviewable products, which make up 45% of our business," said Roger Edwards, products director at Bright Grey. "We won't be writing our own business, however. Guaranteed rates will be suited to IFA clients with larger incomes," he said.
