A major theme at last week's LIA conference was the need to encourage further critical illness (CI) ...
A major theme at last week's LIA conference was the need to encourage further critical illness (CI) cover being taken up as soon as possibly by clients of IFAs.
CI premiums are set to start rising sharply due to the effects on the insurance industry of the events of 11 September and the need to increase insurers' capital reserves depleted by falling share prices.
And the Association of British Insurers is about to adopt new language on the definitions of cancers and heart attacks that could move premiums up for clients older than their mid-40s.
Nick Kirwan, chairman of the ABI CI working party and head of marketing and product development at Scottish Provident, said the CI market had exploded during the past 12 months.
The explanation was partly that it offered IFAs contrained by Stakeholder and the 1% world another avenue of income.
Yet more needed to be done, he said, to encourage the takeup of CI cover, not least among UK home owners, of which some 4 millions were still without CI cover.
The ABI will be releasing re-written guidelines for CI policies soon, and there will be EU directives driving significant changes to exclusion clauses over the next few years.
The ABI working party is keen for IFAs to understand these changes, and wants to ensure as much as possible that cover taken out now does not lead to rejected claims 10 or 20 years down the line.
Kirwan said that when payouts did not happen, it affected the entire industry, creating a bad reputation.
IFAs needed to ensure CI was sold to clients as cover first, with premiums being of secondary importance.
He was confident, however, that in 10 years' time the average person on the street would be able to say: "I know someone who has had a CI payout."
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