Growth in the cash plan market has been confirmed by the launch of four new products. T...
Growth in the cash plan market has been confirmed by the launch of four new products.
The market has seen launches from the not-for-profit player BHSF and from PMI providers such as Standard Life Healthcare, Norwich Union and Legal & General.
The BHSF product has been launched with the intermediary specifically in mind and includes a wide range of benefits including dental, hospital day case surgery, hospital inpatient, recuperation, maternity, therapies and health consultation.
Although commissions on cash plans are usually low, if they are offered at all, BHSF is now offering IFAs 15% of premium income a year on purchase and on renewal.
Commenting on the launch, Steve Boughton, commercial manager at BHSF, said: "We wanted to design the product from a clean sheet it has an appropriate level of commission with the flexibility to cope with the different requirements of intermediaries."
This flexibility includes the option to remove the commission in exchange for a reduced premium and in a bid to target IFAs, BHSF has teamed up with Policy master and is now included on the PMI quote facility, Mediquote.
Legal & General Insurance has also announced its entry into the healthcare cash plan market with the launch of Essentials Cash, a three-tiered plan with cover starting at 40 pence per day. IFA commission can be taken either as a one-off payment of 40% of the first year's premium, or 10% initial and renewal.
Standard Life Healthcare has built on its launch into the cash plan market last year and has introduced two new corporate plans.
One plan allows groups of three or more unrelated employees to be covered and has a 10% discount off individual rates, with larger discounts applying for groups of over 100 lives. The company has also launched an employee-funded Voluntary Health Cash Plan, where premiums are collected through payroll deduction and claims paid straight into the employee's account.
Norwich Union Healthcare has also launched an employee only cash plan option for group schemes, which allows companies to reduce the cost of health insurance by just covering staff and excluding their families.
As cash plans are a low premium product, with traditionally low commissions, few IFAs have ventured into the market. However Boughton says interest is growing the product is moving upmarket and demand is coming from IFA's target market. "Benefits are now set at a level appropriate to more people and we are seeing more interest from professionals such as accountants, solicitors and senior managers. Premium levels have also gone up and so for a product with very little work, IFAs can now receive a reasonable income."
l For more details on cash plans and products currently available, turn to the COVER survey which starts on page 39.
