The balance between meaningful cover and affordable price is continually being sought, says Matt Rann
The speed at which advances in medicine occur is ever increasing. As a result, providers are looking closely at the definitions of illnesses used within their products which trigger claim payments.
A central issue for any provider is to offer worthwhile cover at an affordable price. However, the debate about what constitutes a critical illness (CI) and what is not is increasingly discussed. This is a difficult question to answer.
For instance, the word cancer strikes fear into the hearts of many people, yet any skin cancer other than malignant melanoma is excluded from CI policies. This decision was made on the premise that most skin cancers can be successfully treated, would not be considered life threatening and as such are excluded. The important exception is invasive malignant melanoma, which is a very serious form of skin cancer. If the so-called minor cancers were covered the price of the product itself would increase substantially in line with the number of expected claim payments.
The balance between meaningful cover and affordable price is continually being sought. This balance can be seen in the recent findings of the consultation paper on prostate cancer whereby there is a strong opinion that minor prostate cancers are excluded with the possible option that all prostate cancers are covered ' but at an extra cost.
A more recent advance in medicine has resulted in the use of a biochemical marker, troponin, in the diagnosis of heart attack. This test is more sensitive than the current marker used, with the result that many more claims might be paid out. With the current marker becoming outdated, the inclusion of troponin within the definition looks likely.
Despite this, the current thinking is that there will be little impact on current rates as the main impact of the marker will be to identify those who have heart disease which is likely to progress to a heart attack. As such, any claim would be paid earlier than currently expected which has a knock on effect on the premium calculations. Rather than see any effect on current premium rates, it is thought this can be offset against future rate improvements which would occur naturally through the reducing number of heart attacks that are being seen.
Heart attack is the most likely definition to change in the short term. But medicine is advancing rapidly and it is essential that any product provider is alert to these changes and the possible impact on product design, its critical illness definitions and the overall price of the product.
An equally important issue for providers is to gain and keep the confidence not only of IFAs, but of those who buy the product. For instance, the likely changes to the prostate definition have been discussed and agreed with various consumer bodies including the Prostate Cancer Charity. It is essential that this dialogue continues.
In addition, the industry should produce plain English guides explaining exactly what is and is not covered. With the possibility that some definitions may look to use medical terminology it is vital providers ensure that high quality technical guidance is made available to all interested parties.
Only through open discussion and debate and through the availability of expert guides and assistance will the industry maintain confidence in the product.
