Critical Illness and Disability Cover for Children - Because the Future is Unknown

Craig Harding, Managing Director of Altrisk

Few individuals enjoy contemplating the emotional and financial consequences for their family if they were to contract a serious illness or become permanently disabled due to illness or injury. But what is often overlooked is what the repercussions would be of their child’s illness or impairment and the parents’ ability to financially provide for ongoing healthcare and therapy.

“Preparing for the future in this regard is an important and valuable exercise that brokers should be doing with their clients - one that can make the emotional devastation of a child’s illness or disability more manageable knowing that you are financially capable of providing the very best care and medical intervention. The financial consequences of a child’s impairment or illness may be even more onerous on a family than that of an adult when one considers that in many cases, a parent may have to take time off work temporarily, and possibly permanently, to care for their child,” explains Craig Harding, Managing Director of Altrisk.

Critical Illness and Disability cover for children is provided as part of the cover of the adult insured - a rider benefit in a policy providing mainstream benefits. Given the low cost of these children’s benefits, cover in the form of rider benefits is the most sensible as they are not financially viable for insurers on a freestanding basis. Families are likely to insure all their children rather than selectively, so a combined policy makes sense,” says Craig.

Altrisk offers cover for children under the following benefits:

· Comprehensive Critical Illness Benefit (covers children of the policyholder for dread diseases)

· Trauma Plus Benefit (covers children of the policyholder in the event of serious medical conditions, accidents, violent crime, impairment and others)

· Female Protector Benefit (covers children of the policyholder in the event of children’s cancers and physical impairment)

Unlike life cover which has important legislated limits to providing cover for children to mitigate moral and anti-selection risk, there are no regulatory limits in respect of critical illness and disability cover for children, so insurers set their own maximums based on the risk they are willing to take. “Children are in general not underwritten so the policy terms and conditions need to be designed to manage any anti-selection risk to the insurer. Sensible conditions and limits are necessary to avoid moral risk as much as possible,” explains Craig.

The benefits of Critical Illness and Disability cover apply equally to both adults and children and they are essentially designed to ensure:

• That the insured has the means to pursue the best medical care possible
• Allowance for a parent, spouse or partner to take time off to care for the insured during rehabilitation
• As far as possible prevention of financial hardship as a result of medical expenses
• Provision is made for child care, nursing care at home or other forms of assistance
• In the event of a disability that modifications can be made to the insured’s home or car in order to remain accessible and independent as far as possible