Scottish Widows and Scottish Equitable Protect are considering a move into the guaranteed critical illness market, officials have confirmed.
Steven Crosby, product development manager at Scottish Equitable Protect, says going into the guaranteed CI sector is “something the firm has been considering for a while” as the life office opted to stay out of the market during May 2003, when demand for products increased and new providers entered the arena.
“It is just a possibility at this stage because all of the discussion points which discouraged us from entering earlier are still valid. There is an inevitability about the current product as guaranteed rates are still going to be a luxury item in the future and expensive to buy. The other issue is whether we are going to see a difference in the way benefits are paid out,” adds Crosby.
Nick Kirwan, protection marketing director at Scottish Widows, says the life office is also “actively considering” moving into guaranteed CI but it is too early to make a formal announcement of when and what the rates might be.
”We’re obviously thinking where to take the protection proposition next but we are actively considering it,” says Kirwan.
Officials at both firms point out there is still strong demand from consumers for products, however, the price of buying such protection products is likely to continue to climb over the next few years as companies believe lump sum payouts for the huge variety of medical conditions do not necessarily reflect advances in medical science and treatment.
At the end of 2003, when CI product capacity was squeezed, it appeared providers would begin pulling out of the market as the cost of policies would need to rise to reflect the lack of capacity but consumer demand for guaranteed products.
Since then, however, new reinsurers have entered the market and capacity has been freed again, making it possible for most protection providers to consider offering guaranteed CI policies.IFAonline
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