WPA Multi-Family Healthcare Plan
WPA describes this as the first multi-family healthcare plan. It means that extended families (grandparents; parents and children usually) can, in effect, have a mini group policy for the entire family, offering significant premium savings as well as convenience.
So, a policy could be taken out by grandparents to cover their adult children and/or their grandchildren. Or, a parent might cover their children and their own parents.
Theoretically cross-generational policies can fall foul of technical matters such as the lack of insurable interest but, as the plan generally pays just for treatment and because we can’t see much risk of moral hazard risk, such issues should be of little concern to insurers. But, insurers are often traditional in their thinking – hence such cover has not been widely promoted in the past.
WPA does requires members to be related by blood, marriage, civil partnership, cohabiting couples, adoption or fostering.
The plan has no age limits, and switch, moratorium and full medical underwriting options are available. There is a choice of three cover levels – Standard (with very limited outpatient limits), Enhanced (with a £500 limit for specialist consultations and tests, and physiotherapy and other therapies) and Comprehensive (highest cover). Customers choose where and by whom they are treated as there is no open referral option and cover levels can vary between members too.
A family of five people, comprising a couple aged 73 and 72 living in Exeter, with a couple aged 47 and 46 in Reading and their 15 year old child could pay £4,026.86 a year for comprehensive cover each year with £500 shared responsibility (WPA’s co-payment system). WPA says that comparative cover with other insurers could cost almost twice as much.
Comment: We have long advocated cross-generational insurance and have always been amazed at PMI insurers insisting on stopping cover when children get to 21 or less. So WPA’s move to embrace cross-generational cover is one we welcome. We’re not sure if it should be called ‘family group cover’ or ‘mini group cover’ or some other title but we do expect others to follow and to go down a similar route.
From a marketing viewpoint, grandparents are now often the breadholders if no longer breadwinners and adding on your kids and grandkids adds (relatively) little to what is already an expensive product. For intermediaries, such cover can also get them in front of other family members, although gathering health information can be more complex (so we hope brokers don’t choose moratorium underwriting just because it’s easy).
The plan itself offers a choice of three types of cover, while WPA’s track record on service (we still like the fact it publishes its directors’ phone numbers) and recent low price rises (which it puts down partly to shared responsibility) make it a candidate not just on price.
Plus points: A new concept – cross-generational family PMI paid for by whoever can best afford it; With mini-group discounts; Three cover levels available; Shared responsibility helps keep costs and price rises down.
Not so plus points: This is an untested market; Insurable interest? (no, we don’t think it’s an issue either); Potential IHT liabilities (ditto); WPA has quite a small broker agency list (by choice).
Website: http://www.wpa.org.uk.
Rating (max 10): Innovation: 9. Overall: 9. Platinum
Tags: WPA; PMI