Cigna Over 50s Life Plan
Cigna’s new whole of life policy is available to UK residents who are aged between 50 and 75 at outset and is only available as single life cover. The maximum sum insured is £40,000 and underwriting is in the form of answering just four questions, which can be either online or by telephone. There is no claims moratorium on the policy (unlike guaranteed acceptance plans) and customers go on risk immediately. Non-smokers pay less than smokers.
The four health questions are:
Have you ever been diagnosed with diabetes, cancer, heart disease, stroke, organ failure, COPD, chronic bronchitis, cystic fibrosis, emphysema or sleep apnoea, multiple sclerosis, motor neurone disease, Parkinson's, Huntington's or Alzheimer's, HIV/AIDS, any mental illness requiring hospitalisation, or used illegal drugs and/or had a (regular) daily alcohol intake of greater than six units per day?
In the last three years have you had Crohn's disease or ulcerative colitis or any disorder of the kidney or liver (including hepatitis) that required ongoing medical supervision or review?
Are you waiting to have any medical investigations, tests or scans or are you awaiting the results of any medical investigations, tests or scans?
Please enter your height (without shoes) and weight (in indoor clothes).
Premiums are fixed throughout life but cease at age 90, with cover continuing until the customer dies. An Advance Claim payment option results in Cigna paying the lower of £5,000 or 20% of the sum insured within 48 hours of receiving all relevant documents, with the balance of the sum insured then paid once medical records have been assessed. Trust forms are available from Cigna on request.
A 65 year old non-smoker would pay £15 a month for £3,336 of life cover. That compares to £2,784 of cover with the equivalent plan from Legal & General, £2,690 with SunLife and £2,476 with Aviva, Cigna’s website says (based on rates on 20 May 2015).
Comment: Some commentators are becoming particularly fidgety about guaranteed acceptance type whole of life plans. They are certainly easy to buy, they don’t ask (any) awkward medical questions and they can offer very good value if you die at the right time (typically after 6-24 months but before a decade or so). But many offer poor value if you survive for much more than a decade (less in some cases) , with the vicious twist that if you stop paying premiums you get nothing back, while if you continue, value for money gets progressively worse until you die. Do customers realise that when they take out these (very popular) plans? Hmmm… perhaps the FCA can tell us.
Cigna’s solution is to offer a halfway house between such plans and fully underwritten cover, with its 30 plus pages of detailed medical and other information required, high levels of ratings and potentially no cover at all if you don’t get all your answers right (OK, we exaggerate, but you get the point).
Instead there are just four underwriting questions (a tactic followed very effectively by mortgage endowment providers back in the 1980s). Those questions are quite extensive and could lead to quite long answers, so are not to be taken lightly. The cover itself is basic, but there again that’s probably all most people want anyway.
Trusts are available (if you ask) and premiums stop at age 90, which means you know in advance what the ‘worst case’ scenario can be in value terms (i.e. living too long). The maximum benefit is just £40,000 but that’s still way more cover than the average 50+ year old currently has. Overall, if you’re in the market for this type of plan, it’s worth looking at.
Plus points: Simple, affordable life cover; Cover lasts throughout life but premiums stop at age 90; Can offer a better deal than most funeral/guaranteed acceptance type plans and is much easier to buy than most full fat WL plans.
Not so plus points: A fully underwritten plan might offer better value (albeit with a greater risk of being rated or declined); The maximum sum insured is relatively low; Single life only (but is that really a downside?).
Website: http://www.cignainsure.com
Rating (max 10): Innovation: 8. Overall: 8. Gold
Tags: WL; Cigna