Old Mutual Wealth Critical Illness Cover
Old Mutual Wealth (previously Skandia Life) has brought in a number of changes to its existing critical illness insurance (CI) plan. These include:
New full payment conditions. Ten new conditions have been added, which takes the total number of conditions covered up to 65. Full payment is now made on diagnosis of intensive care (provided it is of ten days continuous duration); Kennedy’s disease; neuromyelitis optica (also known as Devic’s disease); Peripheral vascular disease (with bypass surgery), and spinal stroke.
New additional payment conditions. Plans now make an additional payment for carotid artery stenosis (if treated by endarterectomy or angioplasty); central retinal artery or vein occlusion; diabetes mellitus type 1; ovarian tumour of borderline malignancy or low malignant potential, and pituitary tumour.
Improved definitions. Definitions have been improved for heart attack (about 20% more heart attacks are now covered); stroke; multiple sclerosis; aplastic anaemia; benign brain tumour; benign spinal tumour; cerebral arteriovenous malformation; coma; coronary angioplasty; coronary artery by-pass grafts; HIV infection; loss of independence; major organ transplant; respiratory failure, and third degree burns.
Simpler and clear definitions. Definitions have been simplified and clarified for Crohn’s disease; dementia (including Alzheimer’s); kidney failure; motor neurone disease; significant visual impairment; third degree burns; loss of hand or foot; primary pulmonary arterial hypertension; terminal illness; traumatic brain injury, and cerebral aneurysm.
Changes to surgery benefit. Surgery benefit now pays out sooner (now if the customer is on a waiting list rather than waiting for the surgery itself). The benefit also now pays out on more surgeries.
In total, Old Mutual Wealth now pays out on 65 conditions. Of those, 47 are main conditions and 18 of those are ABI+ definitions. It also pays additional benefits on 18 conditions, has a surgery benefit and covers children for 47 conditions plus surgery benefit from birth to age 21 (and pays double if both parents have a policy or jointly have a policy).
Terms from five to 40 years are available, and premiums are guaranteed throughout. As an alternative, a rolling ten year term can be chosen. This runs for ten year periods and can be last renewed at age 67. This approach means a lower initial premium than choosing a much longer term at outset, but a premium that rises every ten years.
Comment: Old Mutual Wealth is the new name for Skandia and, though the name is not yet well-known in the UK protection insurance market, Old Mutual is one of the largest financial services providers in the world – it has 16 million customers worldwide – so potential customers are buying into a very big brand.
It’s hard to argue against the changes made – new conditions have been added and many existing ones improved , simplified or clarified. It adds up to the simple fact that more customers will be able to claim in future. How many more? Ah, there’s the rub… Old Mutual assures us that more people will be able to claim but we don’t know whether the increase is a small or big number (except for heart attacks where we are told). That’s a criticism that we can and do make about most CI policies but it does beg the question of whether there is a better way. All customers really want to know is if they suffer a life changing and life threatening event that their policy will pay out the appropriate sum. The present approach of adding more and more conditions and applying strict medico-legal tests to each is confusing even to those with a reasonable medical understanding.
Until someone invents a better mousetrap though, we are locked into the current cycle of add, change and widen conditions covered. The bottom line is that CI is now covering more CI’s but none are yet covering ALL CIs. Confused? So are we.
Plus points: A number of new and improved conditions; Better wording for some conditions; A rolling ten year plan means lower initial premiums, often at a time when cashflow is most important to a family; Old Mutual is one of the largest financial services providers in the world .
Not so plus points: As with all CI plans, understanding exactly what is and isn’t covered and what proportion of all critical illnesses are covered is hugely complex to understand; Rolling ten year plans can be more expensive in the long run; Old Mutual is not yet well known in the protection insurance sector.
Website: http://www.oldmutualwealth.co.uk.
Rating (max 10): Innovation: 8. Overall: 8. Gold
Tags: Old Mutual Wealth; CI.