What is Critical Illness Cover?

The thought of being asked deeply personal health questions can be daunting for some customers. But, who better to trust with this information than you (their adviser)? You already have copies of their bank statements and payslips, you’re the gatekeeper of their wealth secrets, so why not their health too? Striking up a conversation with a client to find out if they have thought about how they would manage in the event they are unable to work due to a diagnosis of a serious illness might not be something any adviser looks forward to doing, but it is nonetheless essential your customers have at least some contingency planning in place. And the only way they can do that is if they are aware of what their options are for managing their finances and benefitting from some kind of support. This is where protection insurance comes into your discussion.

So far in this series where we have examined the different types of protection insurance policies currently dominating the market we’ve covered Family Income Benefit, Life Insurance and Income Protection, so now it’s time for Critical Illness Cover (CIC). With recent figures suggesting 1 in every 2 people with likely be diagnosed with cancer at some point in their life, no adviser can afford to leave their customers unprotected and without the proper policies in place. Find out all you need to know about critical illness cover and what you can do to help your customers gain a better understanding of just how essential this type of insurance actually is.

Who Can Benefit From Critical Illness Cover?

Modern research doesn’t make for great reading as we’re constantly told of the rising number of cases of serious ailments such as cancer and various auto-immune diseases. However, it has led to an uptick in the number of UK residents who feel the need to comb through their options when it comes to the various protection solutions. Whilst Critical Illness Cover (CIC) can be a fantastic product for some customers, it’s important to point out that this product isn’t for everyone. It’s very unlikely that customers with existing health problems, those with a family history of serious illness, smokers or those who take part in extreme sports will be accepted by insurers. It’s also important to be aware of exclusions that would rule out your customers.

But by knowing your customers well, you can build up a picture of whether this policy could benefit them and their families and which illnesses they’d want to be covered for. These parameters can help make it easier to identify who the product can really offer value to.

Customers may benefit from having CIC in place if they:

• Have dependents, financial commitments and they heavily depend on their income
• Are a single homeowner and don’t have a partner to help share financial commitments
• Haven’t got access to a benefits package from their employer or are self-employed
• Don’t have savings to help act as a buffer if needed

Honesty is Key

A common preconception held by some customers is that insurers won’t actually pay out when they come to filing their claims, which would ultimately mean that their insurance and their paid premiums amount to nothing. As an adviser, it’s your responsibility to quell these concerns and support your customers in coming to an understanding so that all parties can move forward in a manner that is honest and cooperative. It is absolutely worth noting however that one of the primary causes for pay-outs not being authorised is due to essential information being omitted from a client’s application. For example, if a customer has stated on their form that they don’t smoke but then submit a claim for lung cancer this can be cause for suspicion and may then go against the insurer’s policy for sanctioned pay-outs. Make sure your customers are aware of any terms and conditions such as particular illnesses which go against their policies.

The Golden Thread

Trust and honesty are the golden thread when thinking about this policy type. The relationships you build with your customers really shine here. Customers need to trust you with their most personal information, and they need to make sure they’re honest when answering questions about their health. In making sure customers understand the consequences of not declaring existing conditions, i.e. their policy being invalid, advisers can secure good outcomes for them and put their needs at the forefront.