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LV= Critical Illness

February 2020 LV=: CI

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LV= has introduced a number of changes to its CI policies.

In total, some 87 conditions are covered, although that is not the full story.

There are now 49 rather than 44 full payment conditions, although some previous conditions have been combined. The new conditions covered are:

•             Brain abscess.

•             Brain injury due to trauma, anoxia or hypoxia (the old definition but expanded).

•             Crohn’s disease.

•             Heart failure.

•             Severe mental health.

•             Severe sepsis.

•             Spinal stroke.

•             Syringomyelia or syringobulbia.

•             Ulcerative colitis.

Also, nine new additional payment conditions have been added:

•             Aortic aneurysm.

•             Cauda equina syndrome.

•             Cerebral or spinal arteriovenous malformation (the old condition but expanded).

•             Cerebral or spinal aneurysm (the old condition but expanded).

•             Gastrointestinal stromal tumour (GIST) or Neuroendocrine tumour (NET) of low malignant potential.

•             Guillain-Barré syndrome.

•             Less advanced cancers of 20 named sites and of specified severity.

A number of other changes have been made including:

•             Enhanced neurological payment is now paid up to age 55 (previously 45). The amount is now double the sum insured (max £200K).

•             For major organ transplant, liver failure or severe lung disease the benefit is also now twice the sum insured (max £200K). There are no age restrictions, and the benefit is doubled on children’s claims.

•             Cover can run to age 80 (with inflation linked cover continuing up to age 70).

•             Maximum term has been increased from 40 to 50 years.

For the most claimed for condition – cancer - there is a new £1,000 payment for policyholders, or any child covered by the policy, diagnosed with one of the listed cancer conditions where evidence of diagnosis has been provided. The payment is made before a claim is fully reviewed by an assessor, would not reduce the amount of cover and is designed to help with additional costs of being diagnosed with cancer.

Cover is available up to 50 years (to max age 80) for level and decreasing cover. Other improvements include simplifying the amount paid for enhanced payments to twice the amount of cover up to an additional £200,000, increasing the age of diagnosis to 55 for neurological enhanced payment conditions, and introducing three organ-related enhanced payments – major organ transplant, liver failure and severe lung disease.

Extended children’s cover is included as standard and features include:

•             Cover is from birth and is now extended to age 23 (with no requirement to be in full time education) for 85 conditions and there is no minimum survival period.

•             Pays out 50% of main policy cover, up to £25,000 per policy, plus enhanced payments for 13 conditions through either accident or organ-related. Payments are up to £50,000.

•             New £5,000 child’s funeral payment and new ‘junior option’, allowing a child to take out their own CI cover within six months of their 23rd birthday without medical underwriting.

•             Confidential member helpline for older children (and parents) to support them through challenging times, providing valuable day-to-day mental health support to dependants from age 16.

LV= earlier announced it is working with Maggie’s, a charity offering emotional and practical support for people living with cancer and their family and friends.

Comment: According to CI Expert, LV=’s last major CI update was back in 2013 and, since then, competitors have developed their plans, while LV= has arguably focused more on income protection.

That has been remedied with a raft of changes that add up to wider and better cover. Talking of adding up, LV= has also merged conditions where possible, so a simple counting of conditions covered is no longer an appropriate strategy for advisers (if indeed it ever was). Instead, advisers increasingly need to look to expert analysis by such as CI Expert and Protection Guru to try to work out what it all means for clients – a comment that applies to all CI plans, not just LV=’s.

One criticism (from Protection Guru) has been including aplastic anaemia within the cancer definition. Arguably, this is technically incorrect, and a more serious effect could be if any customer doesn’t claim because they believe their aplastic anaemia is not covered. Clear communication will be the key to avoiding that.

All in all this adds up to a comprehensive and welcome update.

Plus points: A raft of updated and improved benefits; Including to children’s cover; Some simplification through conditions amalgamation.

Not so plus points: Merging aplastic anaemia into the cancer definition is seen by some as a retrograde step; All top CI plans are now very complex for both advisers and customers.

Website: http://www.lv.com.

Rating (max 10): Overall: 8.5. Gold

Tags: CI: LV=

I Mark: No

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