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July 2019 LV=: CI

LV= has introduced updates to three of its 100% conditions and one additional payment condition for its critical illness plans. The main changes are:

100% Conditions

·         Benign Brain Tumour. Previously benign brain tumour claims were paid on diagnosis alone. Now LV= adopts the market norm and requires certain treatments - full or partial surgical removal, radiotherapy or chemotherapy.

·         Motor Neurone Disease. Six motor neurone conditions are now listed rather than just ‘motor neurone disease'.

·         Third Degree Burns. The requirement for facial or head burns has been cut from 50% of the area to 20%.

 Additional Payment Conditions

·         Partial Third Degree Burns. This condition has also been improved by cutting the facial or head burn requirement from 20% to 10% of the surface area.  The payment is the lower of £12,500 or 12.5% of the sum insured.

Comment: These are relatively minor changes and, but for the benign brain tumour change, will mean even more claims being paid in future. The offset is that LV=’s previous benign brain tumour wording has been changed to now require intervention – as almost all other insurers already did.

Presumably this was changed as LV= believed its previous position was no longer tenable. That could be because medical advances are diagnosing more conditions that meet the clinical definition but are relatively unlikely to be life threatening or life changing. Such a change may be unwelcome but if it just cuts out windfall claims (where a customer receives a payout but whose life is largely unaffected) is that really a bad thing? We have been here before too on CI plans (and more than once) – for example, at one point balloon angioplasties paid 100% benefit until the procedure became more common and patients went on to have a good prognosis will little lifestyle disruption.

LV+ is rumoured to have more changes in the pipeline so we will report on those as and when they emerge. Meantime, LV= looks to have lost a differentiator but it looks doubtful that other insurers will look to now widen their own benign brain tumour definitions to offer advisers an alternative.

Plus points: Some definitions have been improved.

Not so plus points: The benign brain tumour definition has been narrowed and now follows the market norm; Having multiple MND definitions adds complexity.

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

Rating (max 10): Overall: 8. Gold

Tags: CI; LV=