Stephen van Niekerk, Head at Momentum Retail Insurance Products and Solutions
Your clients have different levels of comfort when it comes to financial security. However the same does not apply to critical illness cover.
I am sure you will agree with me when I say that comprehensive critical illness cover has become a non-negotiable for clients. Having the peace of mind in knowing that they will be covered and receive a claim pay-out in the event of contracting a critical illness has become a priority for most clients.
Product evolution
If I reflect on the insurance industry and how the concept of comprehensive critical illness cover has changed and improved over the years, the catch-all benefit category comes to mind.
It was introduced a long time ago as a mechanism to ensure that clients can enjoy peace of mind in knowing that they are covered, to some extent, should they contract a previously unknown disease or condition.
Although the catch-all benefit category does offer clients more peace of mind with regards to comprehensiveness, the level of comprehensive critical illness cover which this offers varies a great deal from one insurer to the next and is only applicable to unknown diseases or conditions.
This got me thinking, especially after reading a recent article in BBC News which highlighted a bumper load of nearly 1 500 new viruses that were discovered on the globe. It then comes as no surprise that a virus like Zika almost paralysed a continent like South America in 2016.
With the phenomenal advances on the medical and technological fronts that allow for new discoveries like these, it once again emphasises our vulnerability as humans.
Ahead of change
In light of the above, it has thus become vital for insurance companies to not only ensure that their clients enjoy comprehensive critical illness cover, but to also structure their risk benefits in a way that supports medical and technological advances.
However, flexibility – along with affordability – has to remain top of mind. In line with this, so-to-speak new generation critical illness benefits must also cater for early pay-outs. These need to be aligned with early detection trends, especially if one considers the likelihood of developing cancer which stands at one in ten before the age of 65 but increases considerably to one in two at the age of 85.
Another crucial aspect to consider in the design of critical illness benefits is the simplicity of the benefit itself. The industry is notoriously known for complicated critical illness benefits where clients are not sure what they are covered for and if that cover is comprehensive enough.
Then with longevity, it is important to incorporate this into critical illness cover.
This is simply because, as per the above mentioned statistics, the longer we live, the higher the likelihood of contracting a critical illness and we would need to fund expenses for a longer period of time. Therefore, critical illness benefits must provide clients with additional payments over and above any initial lump sum payments.
Levelling up
Although the catch-all benefit category was created to cater for the unknown, one insurer has redefined the concept of comprehensive critical illness cover. This insurer managed to remove the practice of competitor analysis in terms of coverage because comprehensiveness is now absolute and guaranteed.
Equally important, with critical illness cover for children now becoming a focal point in the insurance market, the design for this should be as progressive as critical illness cover for adults. As a result, insurers should ensure that their critical illness cover for children also provides the widest possible protection against child specific conditions, from birth.
By ensuring that clients and their children enjoy the most comprehensive critical illness cover in the market, it allows insurers to focus attention on refining and designing new products that can address future client need today.
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