HSBC Life launches critical illness plans - CIExpert analysis

After entering the advised space with a life assurance proposition last year, HSBC Life has followed it with the launch of two critical illness products - critical illness and critical illness plus - both only accessible to advisers via UnderwriteMe. Each are available as a standalone plan or with integrated life insurance.

CIExpert director Alan Lakey said the model follows the trend started by Aviva "where a lower cost basic plan runs alongside a more expensive and more comprehensive version".

The basic plan offers 38 named conditions, two additional payment conditions (for low grade prostate cancer and carcinoma in situ of the breast) as well as terminal illness and total permanent disability cover.

"The wording for Parkinson's disease also encompasses Parkinsonian syndromes, of which multiple system atrophy and progressive supranuclear palsy are two, however HSBC include these as separate conditions whereas corticobasal degeneration, diffuse lewy body disease and Parkinsonism-dementia-amyotrophic lateral sclerosis complex, are not specifically named," Lakey pointed out. "This should serve notice to advisers that the counting of conditions remains a pointless and misleading exercise."

HSBC has included benefits such as up to 90 days immediate free cover for mortgage-linked applications and guaranteed insurability of up to £150,000 until age 55 for birth, marriage or  mortgage borrowing.

The verdict

Lakey, who described the plan as "solid", said it is positioned as "high quality" but "without causing sleepless nights" to insurers "sitting at the peak of the quality table".

He added that its appeal for will be heavily dependent on pricing, administrative prowess and underwriting capability.

"By restricting child cover until age 30 days for their CI plus plan numerous birth-defect conditions such as hole-in-heart have been excluded and this compares unfavourably against most of the quality plans in the market who have shifted to birth to 22 without a full time education requirement," said Lakey.

He also pointed to an obvious contradiction in terms. "One curious aspect of the critical illness plus policy is the inclusion of bladder removal due to carcinoma in situ of the urinary bladder. This is already covered within the less advanced cancer of the bladder condition which pays out purely on diagnosis, thereby rendering the inclusion of the bladder removal condition futile."

Lakey concluded: "Advisers are often wary of insurers, particularly bancassurers, that have traditionally set out to gain direct to consumer business thereby placing themselves as rivals. HSBC will therefore need to work hard to overcome such a mindset and to convince advisers that they are a major player and not a temporary entrant."  

100% Payment Conditions for both the Critical Illness and the Critical Illness Plus plans
Aorta Graft Surgery Bacterial Meningitis Benign Brain Tumour Benign Spinal Cord Tumour Blindness Cancer Cardiac Arrest Coma Coronary Artery By-pass Grafts CJD Deafness Dementia Encephalitis	Heart Attack Heart Failure Heart Valve Repair/Replacement HIV Intensive Care Kidney Failure Loss of a Hand or Foot Loss of Speech Major Organ Transplant Motor Neurone Disease Multiple Sclerosis Multiple System Atrophy Open Heart Surgery	Paralysis of a Limb Parkinson's Disease Primary Pulmonary Hypertension Progressive Supranuclear Palsy Pulmonary Artery Surgery Removal of an Eyeball Respiratory Failure Spinal Stroke Stroke Third Degree Burns Traumatic Brain Injury
Additional Payment Conditions for Core and CI Plus plans - Lower of £25,000 or 25% of the sum insured
Low Grade Prostate Cancer	Carcinoma in situ of the Breast
100% Payment Conditions for Critical Illness Plus plans only
Aplastic Anaemia Brain Injury due to Anoxia/Hypoxia Cardiomyopathy Crohn's disease (severe)	Liver Failure Mental Illness Necrotising Fasciitis Peripheral Vascular Disease	Pneumonectomy Syringomelia/Syringobulbia Ulcerative Colitis
Additional Payment Conditions for Critical Illness Plus plans only - Lower of £25,000 or 25% of the sum insured
Aortic Aneurysm Aplastic Anaemia (less severe) Bladder Removal Brain Abscess treated by Craniotomy Carotid Artery Stenosis Cauda Equina Syndrome Central Retinal Artery/Vein Occlusion Cerebral/Spinal Arteriovenous Malformation Cerebral/Spinal Aneurysm Coronary Angioplasty Diabetes Type 1 Guillain-Barre Syndrome	Less Advanced Cancers of; Anus Appendix, Colon or Rectum Bile Ducts Cervix Uteri Gallbladder Larynx Lung/Bronchus Oesophagus Oral Cavity Ovary Pancreas Renal Pelvis	Small Intestine Stomach Testicle Thymus Thyroid Urinary Bladder Uterus Vagina Vulva Significant Hearing Loss Significant Visual Loss Skin Cancer Third Degree Burns (less severe)
Children's Critical Illness Cover - Lower of £25,000/50% of sum insured & £25,000/25% for additional payments
Child cover is automatically included in both plans starting from age 30 days until 18th birthday (to age 21 if in full-time education). For each of the two plans children are covered for the relevant adult conditions with the exception of total permanent disability and Diabetes Type 1.

Further reading

CIExpert on latest L&G critical illness changes

• Critical Illness
• 29 July 2019

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• Topics
• Critical Illness
• Adviser / Broking
• HSBC LIFE
• Critical illness plus
• bladder removal