Canada Life CanProtect Level Term Plus
In the UK, Canada Life is best known for its group risk business, although it does offer an individual whole life plan too, through its international arm. Now it is launching onshore term and critical illness cover with four plans that cover term (level or decreasing) with or without critical illness (CI) cover.
Looking at the CanProtect Level Term Plus plan, this product pays:
A lump sum on death during the chosen term or becoming totally and permanently disabled.
The same lump sum on being diagnosed with a terminal illness where the life expectancy is less than 12 months (this benefit is not payable if diagnosis is within 12 months of the policy end date).
Or on diagnosis of one of the listed critical illnesses. This is paid provided the customer survives for at least 14 days from when they meet the definition. There are 42 conditions covered plus 16 additional payments.
A lump sum of £7,500 if hospitalised with physical injuries for a minimum of 28 consecutive days immediately following an accident. This benefit is only payable up to twice.
A lump sum if a child suffers one of the listed children’s critical illnesses. The 14 day survival period also applies here. This sum insured is the lower of £25,000 and 25% of the sum insured. Children’s intensive care benefit pays a similar sum if a child requires continuous mechanical ventilation for a period of seven consecutive days due to sickness or injury. Children’s funeral cover pays £10,000 on death (maximum two payments).
Critical illness covered are: Alzheimer’s disease; aorta graft surgery; aplastic anaemia; bacterial meningitis; benign brain tumour; blindness; cancer; cardiac arrest; cardiomyopathy; coma; coronary artery bypass grafts; Creutzfeldt-Jakob disease; deafness; dementia; encephalitis; heart attack; heart valve replacement or repair; HIV infection; idiopathic primary pulmonary hypertension; kidney failure; liver failure; loss of a hand or foot; loss of independence; loss of speech; major organ transplant from another person; motor neurone disease; multiple sclerosis; multiples system atrophy; open heart surgery; paralysis of a limb; Parkinson’s disease; progressive supranuclear palsy; removal of a complete lung; rheumatoid arthritis; severe lung disease; spinal cord stroke; benign spinal cord tumour; stroke; systemic lupus erythematosus; third degree burns; traumatic brain injury, and ulcerative colitis.
In addition to these 42 core conditions, an additional payment of the lower of 25% of the sum insured or £25,000 is paid on suffering coronary angioplasty; urinary bladder removal; ductal carcinoma in situ of the breast treated by surgery; carcinoma in situ of the testicle; carcinoma in situ of the urinary bladder; cerebral aneurysm of the brain; cerebral arteriovenous malformation of the brain; Crohn’s disease; chronic hepatitis B or C; infective bacterial endocarditis; lung lobectomy; pericarditis; pituitary gland tumour; early stage prostate cancer; removal of an eyeball, and visual impairment. The additional critical illness benefit is payable up to four times on single life plans and six times on joint life plans.
There is also a waiver of premium benefit with a deferred period of 13 weeks. The maximum cover available at outset increases from £75,000 at ages 61-65 up to £400,000 at ages 18-40. The plan stops if premiums remain unpaid after 60 days. The plan is available on a single life or joint life first event basis for customers aged below 66 and cover can last up to age 70. Premiums can be reviewable or guaranteed.
The plan also includes a medical treatment sourcing service, along with a bereavement and probate line. There is also a personal care assistance programme supported by an online health risk assessment tool and a second medical opinion service plus the Red Arc nursing support service for claimants. Exclusions are fairly standard, with suicide being excluded during the policy’s first 12 months.
Comment: Another CI plan with a long list of conditions covered? Yes, but this plan – indeed four plans – is more significant than that. The basic product design may follow a well-trodden path, but the fact that Canada Life, a giant of the group risk world, looks to be serious about the individual (term and CI) market is newsworthy too. What is also significant is that the insurer has worked with UnderwriteMe to integrate its straight through processing and underwriting, so that should lead to faster and smoother turnround times for advisers and their customers.
The plan itself pays out the full sum insured on most critical conditions (we don’t know of any plans that pay out on all CIs yet) and a partial payment on 16 less serious conditions. The add-on benefits are practical too while some of the detail is well thought through. We have long advocated three month deferred periods on waiver of premium benefit and this plan has that. Non-forfeiture also lasts 60 days. Suicide is excluded for the first 12 months but that is also made clear.
Oddly, the actual conditions covered are not set out in the policy document, which refers to a separate guide. In a way that makes sense, but it is not clear what happens if that guide changes in future. We also now prefer all insurers to use the word ‘insurance’ rather than ‘assurance’ in their marketing materials. Customers don’t understand the difference but they do know what insurance is, so why not just use that term?
Overall, the plan looks set to do well. Distribution is being carefully controlled, through UnderwriteMe, with LifeSearch being chosen to be the first to pilot the new plans. Others will follow, but some advisers may find they only get the opportunity to market these plans some way down the line. Perhaps the best thing about these new plans is that Canada Life wants to expand the market rather than to just take market share. We applaud that and hope it works!
Plus points: New term and CI plans from a new player in the individual protection market, albeit already well established internationally and in the group risk space; UnderwriteMe is integral to the design offering time and hassle saving straight through processing; Comprehensive cover, with useful add-ons; Some good detail e.g. three month deferred WOP and 60 day non-forfeiture.
Not so plus points: The basic plan offers few benefits not available elsewhere; Canada Life is not (yet) known as a player in the individual protection market; Some wording needs tidying up; An opportunity missed to make CI cover radically different/better?
Website: http://www.canadalife.co.uk
Rating (max 10): Innovation: 8. Overall: 8.5. Gold
Tags: CI; Canada Life