Old Mutual Wealth's Paul Roberts explores how insurers can reinstate or continue cover following a critical illness claim
Every year medical science comes on leaps and bounds. So much so that according to the Office of National Statistics (ONS), a male born between 2014 and 2016 now has a 21% chance of surviving to at least age 90, while a female has a 32% chance of doing the same.
This is partly to do with medicine's ability to treat diseases that were previously considered terminal. But, modern medicine cannot fix everything and sadly in many cases, you can sometimes cure the illness but the chances are it might come back.
For example, over 1.2 million people in the UK have survived some form of a stroke, but 25% of those survivors have a second stroke within five years.
This causes a dilemma for someone with critical illness cover. They fall ill; they receive their pay-out and are often left without any cover for the future.
On top of this, trying to get more cover after a serious illness can be a difficult and sometimes impossible task. If someone is accepted they might have to pay much higher premiums because of the previous illness. So the question is what do they do if they still have bills to pay and then get ill again?
The short answer is that cover does not necessarily have to end with a claim. The longer answer is when people consider a critical illness policy they need to think about more than just the illnesses it covers. There are a number of different features that some policies have that would benefit someone faced with such a scenario.
One feature is cover continuation for a joint critical illness policy. This means, if a couples' protection policy pays out a lump sum after one of the pair falls ill, rather than the other person no longer being covered they can apply for their own cover. Crucially this means that the member of the couple that was not ill can reinstate their cover without having to go through further underwriting or medical tests.
The second feature is cover reinstatement. This feature means if someone falls ill, makes a claim and their cover ends, they can take out more cover. Once again, there is no need for further underwriting, which depending on the seriousness of the illness could have precluded many people from getting any further critical illness cover at all.
Innovation in the medical world has given millions of people a second chance. However, life cannot always go back to being exactly as it was before an illness. Having the correct protection in place is crucial so people can feel secure in what is often a difficult time.
Paul Roberts is head of protection at Old Mutual Wealth
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