InsureWithMax Child Max
Child Max is a policy that pays a parent if their child suffers a specific medical condition and the parent has to take time off work to look after them.
The child must suffer from a specific medical condition (blindness; coma; deafness; loss of a hand or foot; paralysis of limbs; third degree burns, or traumatic brain injury) or a specified illness (aplastic anaemia; bacterial meningitis; benign brain tumour; blindness; cancer; deafness; kidney failure; loss of a hand or foot; major organ transplant; multiple sclerosis with persisting symptoms; paralysis of limbs, or stroke). Each condition is defined in the policy.
The insurance contract is one of indemnity, so it pays the parent if their take home pay falls (e.g. if they have to move to part-time working) or stops. The plan is available to parents who are employed or self-employed. The monthly benefit must be between £1,000 and £5,000 a month and the benefit is paid for up to 12 months. Minimum single premium is £120. If the child does not survive, the plan still pays up to 12 months or until return to work, if earlier.
Take home pay is defined as earnings actually received (ignoring any overtime and one-off or discretionary bonuses) net of tax/NICs and any other payments. For the self-employed and business owners, it is their self-employed earnings or dividends.
Up to eight children can be covered and they must be the natural or adopted child of the parent and live with them at their address and be aged between three months and 18 years old at the policy’s inception.
Exclusions are reasonably standard for health insurance but also include the parent (or any adult living at that address) injuring the child, pre-existing conditions and living outside the UK for more than 13 consecutive weeks in any 12 months.
The policy is offered by Questor Insurance Services (trading as InsureWithMax.com) and underwritten by Ironsure Europe Ltd via its London Branch, and claims are administered by Orchard Administration Ltd. InsureWithMax says the insurer is rated Au (Excellent) by A M Best.
For children aged three and five, £5,000 a month benefit payable for up to 12 months would cost a one off payment for the year of £335.40 (including IPT). Cover can be purchased online, just by answering a few simple questions.
Comment: The InsureWithMax concept is interesting – qualified insurance underwriter (ACII) Max Robinson had a family situation in 1995 when his half-sister needed care, his father became her full-time carer and his mother became the family breadwinner. Max set up the business in 2014 and determined to offer a policy that would meet the kind of need his family situation had highlighted.
This plan is therefore rather different to conventional protection insurances, although it is a sort of hybrid IP/CI type policy but on the life of a child or children with benefits payable to a parent. That’s not to say it’s a gimmick – it isn’t, and it reflects the fact that in many families both parents now work and if a child becomes seriously ill, it is likely that a parent will have to take leave of absence to look after them.
Many CI policies will include a child benefit, where a lump sum is paid if the child suffers a critical illness. However, there is always a relatively low maximum benefit and, in any case, this plan can be taken out in addition. It pays a monthly rather than lump sum benefit and is effectively an indemnity policy, putting the parent potentially back into the situation they would have been had they been working.
One market for this is probably grandparents funding it and indeed, one reason they may wish to do so is that otherwise they might be required to help look after their grandchild…
Plus points: A new type of cover that pays a monthly sum if leave of absence is needed to look after a sick child; Easy to understand and to buy online; Relatively inexpensive; Can be in addition to any other insurance benefits.
Not so plus points: Many CI policies already include CI cover, albeit with a lump sum benefit; As this is general insurance, premiums are subject to IPT and renewal is not guaranteed; Only pays out if the child has one of the listed conditions and meets the policy definition; Maximum benefit period 12 months.
Website: http://www.insurewithmax.com.
Rating (max 10): Innovation: 9. Overall: 8. Gold
Tags: Other; InsureWithMax