The industry's next step should be to define exactly what the term 'critical illness' means, writes Tom Baigrie
One of the beauties of life assurance is that the cause of claim is rarely in doubt. You are either dead or you are not. So the reason for a claim is never a problem.
The problem with critical illness (CI) is that it can never achieve this level of clarity and with medical science moving the goalposts, long-term consistency is a pipe dream. The proposed changes to the prostrate cancer definition, caused by the Government's planned national screening, are the the latest of several of what will be a continuous process of redefining what is and what is not a critical illness.
The main difficulty is that insurance companies are not trusted by the media or by the public generally, and the initial cries of outrage which greet any worsening of policy conditions will, over time, give a hugely negative view of the product.
The CI marketeers need, as an industry, to present medical science's constant progress as positive and the consequent restriction of certain causes of claim as a logical and acceptable result.
The next step for the industry should therefore be to define what we mean by the term critical illness ' not actually which illnesses are critical ' but rather, what it is that any critical illness needs in order to be insured. Until this point is clarified, there can be no firm benchmark ' other than competition ' of what a CI policy should cover.
The trouble is that this definition is going to be extremely elusive. Is a critical illness one that stops you from working? Not necessarily. Is it one that gives you a high likelihood of death? Not necessarily. Is it one that makes you think twice about whether you should keep going with your present lifestyle, or perhaps forces such a decision on you? Well, that is closer to it, but too woolly to be of any use. Nonetheless, a form of words needs to be found to which all the industry can subscribe.
As a starter, one might propose: 'A critical illness is a condition which is discovered at a point where an absolutely full recovery is impossible and which, unless properly and swiftly treated, would normally lead to death within a period of 10 years of diagnosis'.
Now I am sure this definition is as wrong as it is right, but after a process of refinement it is a definition which will allow future changes in individual definitions to be made as the logical result of medical and public health improvements ' without the appearance of creating ever-worsening policy terms.
It is vital the industry addresses this problem together, rather than adopting its normal fragmented and head-in-sand approach to issues of media relations.
In a positive media environment sales can increase dramatically, rates can come down and the long-overdue process of critical illness ' including life cover ' slowly replacing life cover as the primary recommendation of all advisers can really get going.
