Royal London Critical Illness Cover
Royal London has enhanced its Critical Illness Cover (CI) plans, with a focus on both child and parent benefits and has also improved the plan’s flexibility.
New customers can now have one of three children’s CI options:
CI with no children’s cover (with a reduction in premiums from standard rates).
CI with standard children’s cover available with standard rates.
Enhanced children’s cover with upgraded benefits for children and an increased premium.
The new enhanced children’s cover includes an additional 12 child-specific conditions plus an increased payout for a valid child CI claim. This is 50% of the sum insured up to a maximum of £50,000. So, a child would be eligible for a payout of 25% of the sum insured (max £25,000) for the additional conditions previously only available to adults. They include hospitalisation of a child following an accident, or partial loss of sight, which children are not eligible to claim for under standard children’s CI cover. If a child covered on the policy dies, the policy pays out £5,000.
The 12 new child specific conditions covered are:
• Cerebral palsy.
• Child diabetes mellitus Type 1.
• Child intensive care benefit.
• Craniosynostosis.
• Cystic fibrosis.
• Down’s syndrome.
• Edwards syndrome.
• Hydrocephalus.
• Muscular dystrophy.
• Osteogenesis imperfecta.
• Patau syndrome.
• Spina bifida.
The enhanced Children’s CI option also provides the person covered by the plan and their spouse, partner and children with cover for nine pregnancy complications with a payment of £5,000 per pregnancy. This means if a person has an individual policy and their partner is diagnosed with one of the listed pregnancy complications, they can claim even if their partner isn’t covered under the policy.
Other changes include to the definitions on cardiomyopathy (now called primary cardiopathy and the definition is widened), and being unable to exist independently.
Comment: Royal London says one key driver for these changes was to give customers flexible choices. So, not everyone will need children’s CI when they take out a plan, but they can now add it later. Or, if they have it, they can remove it later. The insurer adds that enhanced cover protects parents from pregnancy through to the children reaching young adulthood.
The moves reflect the fact that children’s cover is increasingly seen as being important to parents but is also now a key differentiator between insurers too.
Doubling the maximum benefit (to £50K) will be welcomed by some, although it is interesting that the death benefit is just £5,000. That reflects insurers’ wider duty not to ‘reward’ parents whose children die – it’s a complex and delicate moral issue but essentially money can’t replace a lost child and protection insurers shouldn’t try. There is also a moral hazard element too. In short, we understand why the CI benefit has been increased but not the death benefit.
The combination of wider children’s cover, a larger maximum benefit, pregnancy benefits and greater flexibility adds up to a powerful and refreshing change from an insurer that is fast gaining a reputation as one of the industry’s most innovate offices.
Plus points: Choice of children’s CI cover (or not to have it); Flexibility to change in future; Pregnancy complications cover; Other changes; Innovative thinking.
Not so plus points: Children’s death cover remains low (but there’s a good reason for that); Some extra complication means a longer sales process; Generally, CI needs more radical thinking.
Website: http://www.royallondon.com.
Rating (max 10): Innovation: 9. Overall: 8.5. Gold
Tags: CI: Royal London