Home service insurer Co-operative Insurance Society is to launch into the critical illness market wi...
Home service insurer Co-operative Insurance Society is to launch into the critical illness market with a policy targeted at its 4.5 million customers, writes Leo Bland.
The product, called Healthcheque, offers standalone cover or accelerated cover when linked to one of the group's term, decreasing term or low-cost endowment plans.
The move comes in the light of many insurers believing that IFAs should be looking at boosting their protection sales in a bid to replace commission income they are likely to lose from personal pensions, with the advent of lower charging stakeholder pensions in 18 months.
However, brokers face an uphill battle to increase market share, with direct sales forces accounting for 70% of new critical illness sales in 1997, compared with 30% for IFAs.
CIS's Healthcheque plan has features including guaranteed premiums for a minimum of 10 years.
For the standalone plan there is a standard waiting period of 28 days on all defined illnesses, except for permanent total disability benefit, which has a six month waiting period. There is no waiting period for the accelerated plans except for PTD benefit. The plan covers 21 conditions and uses the model definitions recently agreed by the ABI.
For the PTD benefit, a daily living activities definition is being used rather than the more commonly-used occupational definitions. CIS said this will allow the policy to be used by those who do not work as well as those in employment. In addition, the product does not have exclusions for AIDS/HIV, aviation or hazardous pursuits.
Martin Clarke, general manager, marketing at CIS, said: "With a large customer base it was important that we delivered an all-round product proposition. We have therefore introduced a competitive product, supported by literature that has achieved the Crystal Mark from the Plain English Campaign and a straightforward claims process to help minimise the burden on claimants.
For a non-smoking male aged 30 next birthday with a £100,000 sum assured over 10 years the monthly premium is £13.80. This goes up to £22.60 for a similar male smoker. A non-smoking female aged 30 next birthday with a £200,000 sum assured over 10 years would pay premiums of £31.60 a month. This goes up to £52.40 for a similar female smoker.
For a non-smoking male aged 30 next birthday with a £200,000 sum assured over 25 years the monthly premium is £44.80, going up to £78.80 for a similar smoker.
A non-smoking female aged 30 next birthday with a £200,000 sum assured over 25 years would pay £44 a month in premiums, going up to £76.40 a month for a similar smoking female.
CIS will also give £2 to Macmillan Cancer Relief for every new critical illness policy it sells.
