New cancer definition for CI insurance is drafted by the ABI CI Working Party
The ABI Critical Illness Working Party has proposed a new draft of the cancer definition for critical illness (CI) insurance.
The latest draft follows news of the Government's intention to introduce population-based prostate cancer screenings across the UK. The new definition, which is open to further consultation, means both aggressive and more advanced but slower progressing cases of prostate cancer will be covered, but less serious cases will not.
The revised definition includes an extra point excluding all tumours of the prostate, unless they are classified as having a Gleason score greater than six or having progressed to at least TNM classification T2. An additional change to the wording of skin cancer exclusions, so that only malignant invasive melanoma is covered, has also been proposed.
The party published a consultation paper in April outlining fears of sudden claim increases, should the screenings detect more cases of prostate cancer before it becomes life threatening. Two possible solutions were outlined: a premium increase, or a change in definition to exclude non-life threatening cases. An overwhelming 80% of respondents opted for option two.
Nick Kirwan, chairman of the ABI CI Working Party, said the change in definition has been proposed to avoid possible premium increases which could make CI cover unaffordable.
'We need to concentrate on ensuring cover continues to meet the needs of consumers at an affordable price. It was felt providers should continue to cover advanced forms of prostate cancer and insurers should be free to offer more cover by changing their premiums if they choose,' he said.
As a result, Brian Lentz, IFA at Portfolio Insurance Consultancy, said advisers will have to make amendments to the CI sales process and IFAs must find out if clients wish to guarantee their cover definitions. He said: 'Advisers will have to establish whether clients want to guarantee their cover definitions as providers will not be able to make changes to the detriment of the policyholder, or guaranteed premiums where cover would cease at the end of the term.'
He added that contracts using a renewable term on guaranteed definitions or guaranteed whole of life construction may become more in demand in the future. 'CI contracts will have to change according to advances in medical diagnostics and treatment and certainty of cover definitions ' coupled with affordability ' could become the norm to prevent disappointed clients in the future,' he said.
