Old Mutual leads the market with critical illness disclosure that provides 100% certainty to customers

Following the recent move in the industry to standardise critical illness disclosures, Old Mutual announced this week that its Greenlight risk solution will disclose o­n quotations provided to customers the 100% cover that it offers o­n the four core dread illnesses according to new industry-standard definitions.

With the Greenlight pay-out percentages mapped against the industry standard definitions for the four severity levels specified under the new industry definitions, it now allows customers to understand exactly when and how much Greenlight will pay out and hence makes it easier for customers to compare the various risk products when wanting to purchase risk cover.

Earlier this month, Asisa (Association for Savings and Investment South Africa) announced the decision by the Financial Services Board and the Competition Commission to vet the life insurers standardisation of their disclosures to consumers around when critical illness products pay out, as well as specifying the level of cover. This step has been deemed necessary to cut out widespread confusion in analysing and comparing risk protection in South Africa.

Says Ursula Torr, Old Mutual’s Risk Solutions Product Manager, ‘Old Mutual firmly believes that even at ‘mild’ severity levels, an illness can have a huge impact o­n your lifestyle. So with our Greenlight risk solution, we recognise that customers need 100% of their cover to pay out if they suffer from o­ne of the four major dread diseases – no matter how mildly. We make no differentiation between the severity levels ranging from level D (least severe) to level A (most severe) o­n Asisa’s dread disease disclosure grid. Importantly, we are proud to say that we are leading the market by being the first to disclose to our customers the 100% certainty that our product provides.’ (see grid below)

‘In addition, Asisa has given life companies until September to adopt a set of standard medical definitions for the four core diseases. However, Greenlight has always provided simple, generous illness definitions and these already in effect conform to Asisa’s critical illness definitions’, remarks Torr.

Old Mutual believes that by adding the severe illness disclosures o­n quotations, it not o­nly makes it easier for customers to understand the risk solutions – but it also makes it easier for financial advisers to help customers to compare products. ‘Transparency, simplicity, ease of understanding and ease of doing business with us are all key aspects of our business ethos,’ adds Torr.

Why is 100% cover important … ?
The four core dread diseases – heart attack, stroke, cancer or the need for a coronary artery bypass graft surgery – account for between 70% and 90% of all severe illness claims.

When you consider that 50% of heart attacks are mild or minor, 40% of strokes result in mild damage and 60% of cancers are stage 1, the conclusion must be that MOST claimants fall into the mild severity category – for which severity based products would typically pay 25% or 50% of the cover amount. Furthermore, lifestyle adjustments that need to be made can be significant – even at lower illness severities. Again, with a 25% or 50% payout, customers may not get the financial protection they need to make these adjustments.

Critical illness solutions are designed to pay out a benefit when a policyholder has a serious illness or suffers a traumatic medical event – which results in financial difficulty. ‘Hence, with a 100% pay-out of their cover amount, customers can enjoy greater financial protection and be assured of their specific illness benefits,’ says Torr.

As modern medicine progresses, the chances are good that people suffering from the four core dread diseases will actually survive the incident and continue to live for at least 5 years. Hence, the greatest need for customers is not o­nly to survive these illnesses, but also to have the financial means to provide for post-event services, such as rehabilitation and redesign of home and workplace, to say nothing of potential loss of income.

‘As the market leader, Old Mutual’s philosophy is that Greenlight’s illness benefits are about lifestyle adjustments with a 100% comprehensive cover and protection of customers’ life quality,’ concludes Torr.

* Illnesses and severity levels shown in the table are as per the Standardised Critical Illness Definitions Project of the Association for Savings and Investment South Africa (ASISA).