When life insurance was created, the driving reason was giving families financial support when they had just lost a main family income.
This was taken further by the invention of critical illness cover by Dr Marius Barnard which aimed to put money into the individuals' hands to support them through illness and hopefully well before death.
The more recent evolution of this over the last decade is to offer various value-added support services alongside the financial coverage. This includes second medical opinions, mental health support and recovery guidance following hospital discharge.
With current challenges that we hear about in healthcare, in my view, these value-added services can be even more valuable to customers.
Looking through our own statistics we can see the take up rate on certain support services is less than we would expect so that leads me to the question, are customers aware that they can access the services through their protection policy? Do they understand they can access these immediately, and do they know the breadth of the services offered?
With the upcoming Consumer Duty changes customers need to understand what is available to them, and more importantly, how to access the support.
When can value added service be used?
The common misconception is that these services are restricted to use at claims stage. Although they can be used to support navigating diagnosis of a critical illness or the death of a family member they are not limited to usage at this point.
Generally, the services can be accessed at any point from the day the policy goes on risk until the end of the term.
There are also no pre-existing condition exclusions. In 2022, 23%* of Scottish Widows Protect applications included a disclosure of mental illness. Many of these customers could begin utilising the services immediately on inception of their policy.
When one should utilise a Second Medical Opinion is an interesting point. Many people have the view that you get a second opinion only when you are unhappy with the first one. However, we are now seeing these also being used to confirm the first opinion was accurate and provide that further layer of peace of mind or simply understand alternative treatments.
Who can use them?
The services are not limited to use by the life assured. RedArc recently confirmed that 19%** of their referrals from Scottish Widows customers are for children and family members of the policyholder.
The services are often utilised by the family members of those suffering from a serious illness. The afflicted family member often receives multiple offers of support but the impact on family members is sometimes missed by the initial care provider, this is where support from RedArc can be so crucial.
What services are offered?
The range of options can vary from provider, but they are much wider that many realise. Long-term emotional support, help to prepare for consultants' appointments, signposting to self-help groups and sourcing suitable equipment & medical aids are some of the areas where support is available.
In my opinion, I would think there are very few scenarios where the value-added service provider would not be able to provide some guidance and signposting as a minimum.
How can we make sure customers are aware of these services?
Advisers and insurers both have a responsibility to ensure that customers are aware of the services included on their policy, it's breadth and how they can access them.
At Scottish Widows, we get in touch with customers a month after the start of their policy telling them how they can "make the most of their cover" providing details of these services and how they can access them.
We understand customers may feel a bit anxious about taking the first step, so at Scottish Widows, if the customer makes us aware that they are interested in support, we get in touch with RedArc on their behalf. This means RedArc will make the first contact with the customer.
Christine Husbands, Managing Director at RedArc, said "Individuals often find it difficult to reach out and ask for help at this time and many don't realise what is available or how to access it. When they receive a call from one of our nurses they are delighted and relieved."
As an industry we should take pride in being able to offer these services as part of customers' protection plans but there is still more educating to be done.
Find out how you can offer protection clients more than financial support and help with their wellbeing. Share our short film with your clients
Sources: *Scottish Widows stats, 2022, **RedArc, January 2023
This post is funded by Scottish Widows.