Alan Knowles: 'I was able to tell my client she could claim almost £10,000 unexpectedly'
Cura managing director Alan Knowles was recently able to tell his client she could claim for Rheumatoid Arthritis under her Serious Illness Cover plan through Vitality. Based on diagnosis alone, she would not have got a pay-out anywhere else. Adam Saville finds out more…Nine years ago, protection adviser Alan Knowles was approached by his client, Melanie* and her partner. They were looking to review their protection in light of a new mortgage. During this, it was deemed that their existing critical illness and life cover was not suitable for their needs. After considering all options, Alan recommended they take a Vitality Life and Serious Illness Cover (SIC) plan.
“They were very keen on quality not price. We therefore went for comprehensive cover [Serious Illness Cover Plus] rather than primary cover [Serious Illness Cover]. Though, for £350,000 worth of cover, having the full amount for Serious Illness Cover was considered too expensive for the client - so we opted for £90,000 SIC each partner [with the rest as Life Cover]. We included her two children on the plan too, before adding their third child a year or two later.”
Alan kept in touch with Melanie over the proceeding years, reviewing their cover periodically but nothing changed significantly until an interaction earlier this year revealed they were remortgaging. Her partner had received an alternative quote from elsewhere, so this triggered another review by Cura.
During the process, she revealed that a year or so ago she had been diagnosed with rheumatoid arthritis; a long-term condition that causes pain, swelling and stiffness in the joints, usually the hands, feet and wrists. The autoimmune disease tends to worsen over time and requires a repeat prescription that would need to be self-funded by the individual.
On hearing about the diagnosis, Alan immediately thought two things:
“Firstly, this could impact a new policy [if that was something they wanted]. Secondly, a claim might be possible because her condition might be covered by her existing plan.”
- Alan Knowles, Managing Director, Cura
The claimAlan asked Melanie if she’d informed Vitality about the diagnosis to see if a claim was possible. “She just said, ‘No, because it doesn’t really affect me that much. I’ve never had any time off work because of it. It hasn’t really got in the way of me doing anything.’”
To manage her expectations, Alan told her he would contact Vitality to find out whether her condition met the definition. “At that time, even though I knew Rheumatoid Arthritis was covered, I wasn’t sure exactly to what extent. I thought there might be certain requirements such as a specific level of symptoms or medication of some kind.”
On further investigation, Alan realised that Rheumatoid Arthritis was covered for diagnosis alone under the plan as a low severity payment (10%). “Obviously great news,” said Alan, whose next port of call was to double check that the claim fell within a reasonable enough timeframe. “Knowing Vitality’s fair approach to customers and their willingness to pay claims, my expectation was that it would not be a problem,” he admits.
Alan’s intuition was correct. After speaking to his account manager at Vitality, he was able to go back to his client and confirm she was able to receive a pay-out of £9,000 (10%). “Had we not carried out the full review, she would not have been aware of this.”
‘Quality not price’Aside from clearly highlighting the importance of checking in with clients regularly about their cover, and any interim health changes they might have had, Alan’s experience also reinforces the benefits of recommending comprehensive cover, based on protection advice focused on quality rather than price.
“Even though my client said she was largely unaffected by her condition, the beauty of the Vitality plan is that my client still has the rest of her cover in place,” he explains. “So, if and when her condition does progress, she knows she can come back and put in another claim.”
Many advisers understand the value of severity-based cover – on the basis that smaller, sequential payments over time, based on impact, can provide more comprehensive coverage than a full lump sum for a more severe diagnosis later down the line.
This is especially pertinent given that one in five cancers1, one in four strokes2 are reoccurring, and seven in 10 people survive a heart attack3. Half of people who survive cancer live for longer than 10 years4. Despite this, one challenge intermediaries often face is convincing their clients of the importance of obtaining cover that stays in place for longer.
“The idea of receiving a one-off £100k or £200k directly into their bank account is understandably appealing to clients, but it usually means they will have experienced something very serious to get to that level,” he explains. “While I always present Income Protection Cover at the top of the hierarchy of needs, I see Serious Illness Cover as somewhere in between that and critical illness plans.
“I would much rather say to a client that there is a pay-out. Even if it doesn’t cover the full mortgage, ultimately, it’s something – and I’d rather my client can pay some of their mortgage than none at all. Especially if it means their condition does not need to get so bad - and their remaining cover stays in place in case it gets worse.”
Unique conditionMelanie’s situation is a real-life example of a Serious Illness Cover claim that would not be covered by any other provider, under critical illness plans5. It would also not have qualified for an Income Protection pay-out, because she has not needed any time off work.
“She would not have had a claim from any other policy,” confirms Alan. “I know in the grand scheme of things, it’s not a large amount, but I would argue that – given the outcome - my client had the best possible cover in place.”
Hitting home the life-changing value of top-quality protection advice, Melanie’s experience is an example of comprehensive severity-based cover in action and how it is more likely to pay out. None of us can predict the future - so why leave your clients’ future health situation to chance?
Find out more about the unique benefits of Serious Illness Cover on offer for your clients.
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1. National Cancer Institute, accessed 2021
2. NICE guidelines, May 2019
3. British Heart Foundation, UK Factsheet July 2021
4. Cancer Research UK, Nov 2021
5. Independently verified by Defaqto, November 2019