Children’s Critical Illness Cover Explained

The month of September is the ninth month of the year and has 30 days. It is also the awareness month for childhood cancer. This is a little-known fact which might just provide you with an opportunity to open up talks with your customers regarding the different types of protection coverage they can arrange for their children. As is the case for practically all types of protection insurance, it can be incredibly difficult to kick off talks to discuss how your customers and their dependents will manage in the event they are diagnosed with a critical illness. Or, if the worst were to happen and they were to suddenly pass away. But an injury or illness to a parent isn’t the only tragedy that can heavily impact a customer’s lifestyle. If your customer is a parent, it’s important for them to be aware of what sort of financial implications caring for a child diagnosed with a critical illness can pose, and what sort of coverage is available that can make such a difficult time that little bit easier. In this article, we will examine what the market for child protection insurance currently looks like, as well as identify what sort of benefits this type of coverage can provide for both your customers who are parents, and their children.

What is Children’s Critical Illness Cover?

As the name would suggest, this policy offers protection for a child if they are diagnosed with a critical illness such as cancer. While the name does provide a fairly straightforward link, there are obviously key differences between this type of coverage and standard critical illness cover for adult customers. Critical Illness Cover (CIC) would ordinarily provide some degree of financial support for your customers so that they can continue to keep up with mortgage repayments, bank loans and generally maintain a similar sort of lifestyle they enjoyed prior to their diagnosis. Children’s critical illness cover can be arranged as a supplementary policy to a customer’s standard CIC insurance that can contribute towards financing the costs of running a household while also caring for a sick child.

HOW DOES CHILDREN’S CRITICAL ILLNESS COVER WORK?

If your customer is able to successfully claim on this kind of policy, they will receive a lump sum payout just as they would for a standard critical illness cover claim. This payout can then be put towards managing some of the additional costs which your customer may incur such as:

• Loss of parental income if your customer is unable to work, either temporarily or over an extended time period
• Travel expenses such as to and from hospital appointments
• Installing medical equipment at your customer’s home, or paying for medicine
• Going on family trips as their child recovers

How Are Children’s Critical Illness Cover Policies Arranged?

The role of a protection adviser is one that requires some hard conversations to be had, and trying to encourage your customer to confront the idea of their child suffering from a serious illness is always going to be particularly challenging. If a customer is interested in setting their child up with this type of insurance, then the process is fairly straightforward. This is because children’s critical illness cover is often arranged as a supplementary policy to a parent’s own critical illness cover, rather than as a standalone benefit. If your customer is able to recognise the importance of owning a CIC policy for themselves, convincing them to take out a similar policy for the long-term protection of their children shouldn’t be too challenging.

How Often is Children’s Critical Illness Cover Claimed?

As with any protection insurance policy, the best-case scenario will actually see your customer never having to make a claim on their coverage. The reality is however that at least some of those who have arranged this sort of policy will experience a serious illness diagnosis for their child and will therefore require the financial support offered by the coverage arranged on their behalf. Some of the most common conditions lenders receive for claims include:

• Cancer
• Strokes
• Coronary surgery
• Benign brain tumours

Tragically the incidence of childhood cancer cases is on the rise, with around one child in 500 receiving some kind of cancer diagnoses before the age of 14. Meanwhile the number of other major health issues experienced amongst children is also showing signs of increase which suggests this sort of policy, for better or worse, might be something you make a more significant part of your proposition.

Is It Worth Offering Life Insurance Coverage for Children?

While we have covered children’s critical illness cover in depth now, it’s also worth exploring what the market for life insurance looks like in regards to policies being arranged for children. There are a select number of specialist products on the market that behave in a similar way to child CIC policies where life insurance arrangements can be added on to cover adults as well as their children. It is also clear that the market is willing to pay for these types of policies. Whole of life policies which cover your customer’s children are also available via select lenders which might be worth offering as an additional choice. Providing your customers with the choice of which kind of policy they want to take out to protect their children will really add value to your proposition and ensure you are meeting all your customer’s needs.

Get In Contact With Our Protection Panel

Here at PRIMIS, we want to provide our advisers and mortgage brokers with the freedom to arrange policies that suit their customer’s individual needs, incomes, lifestyles etc. Browse our full list of lenders and partners here, or view the list below which details our on-panel providers who offer children’s critical illness cover as a policy.

• AIG
• Aviva
• British Friendly
• Cirencester
• Guardian1821
• Legal & General
• LV=
• Royal London
• Vitality
• Zurich