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Continuous Critical Illness Cover has never been more needed

Published: 20/03/2024

Due to a range of external factors, there’s never been a greater need for cover to remain in place for longer after a claim has been paid, writes Director of IFA Distribution at Vitality, Justin Garbutt.

Thanks to major improvements in both the detection and treatment of illness, conditions that would have once been fatal are now far more survivable.

40 years ago, when the first critical illness products were introduced, only one in four cancer patients survived and the average life expectancy was just one year. Today, that number has doubled1, and life expectancy has increased 10-fold2.

"We need to provide more certainty, both that a claim will be paid and that the client won't lose their cover after having a successfully claimed."

- Justin Garbutt, Director of IFA Distribution at Vitality

With these medical advancements though has come the increased likelihood of illnesses returning or new conditions arising.

One in five cancers now are recurrences3 and one in five people who are hospitalised as a result of a heart attack, are readmitted again within five years with a second heart attack4.

More of us are also now living longer, but often in poorer health and with a growing burden of later life care needs as a result of conditions like Dementia and Alzheimer’s.

Shifting consumer needs and expectations

At the same time as these trends, we’ve seen a shifting of consumer needs and expectations.

Recent research highlighted that over 60% of consumers would expect their critical illness cover to continue after making a claim and over 65% said they’d expect the pay-out to match the severity of their illness5.

Despite it also being a product that’s still overwhelmingly pitched by advisers as mortgage protection, 44% of consumers said they used pay-outs to cover medical expenses or lost income5.

There’s also a growing concern from consumers around later life care funding, with almost 50% of consumers either extremely or very concerned about conditions such as dementia and Parkinson’s Disease5.

Rethinking traditional forms of critical illness cover

All of this means that traditional forms of critical illness cover must move with the times and better reflect the needs of today’s clients.

It’s no longer enough for a clients’ to be covered entirely on an ‘all or nothing’ basis, where if they meet a definition wording the policy pays out in full and then finishes, leaving them uninsured and uninsurable

We need to provide more certainty, both that a claim will be paid and that the client won’t lose their cover after having successfully claimed.

There’s increasingly also a need for cover to continue beyond the normal term of the plan, to provide financial protection later into the client’s life for any care needs that may arise.

Exploring the evidence and real-life cases

Vitality’s claims evidence highlights why this is so important, with 1 in 12 claims paid in 2022 for individuals that were claiming for a second or third time6.

It’s also brought to life through real-life case studies, such as Hayley’s Story.

For young mum Hayley, it was a no brainer to take out the most comprehensive cover, but she never expected to claim on it, let alone twice before the age of 40.

At just 36, she was rushed to hospital with a pulmonary embolism. Then, just two years later, she went through it all again after being diagnosed with cancer and having to undergo major, potentially life-threatening surgery to remove a tumour.

Despite Hayley’s Serious Illness Cover plan paying out twice, including in full, her and her partner David both still have cover in place.

“It’s hugely helped and knowing I’m still covered, even after claiming twice, has made all the difference.”

Prioritising quality and value

All of this highlights why it’s essential advisers prioritise quality over merely price when considering recommendations for your clients.

Against the backdrop of changing consumer needs, wider trends shaping our world and a new regulatory landscape, there is a real opportunity for you to deliver a less transactional form of advice and ultimately better outcomes for your clients

Supporting your client conversations

We have developed a range of resources and tools to help you when explaining our Serious Illness Cover and demonstrating the value of our product to your clients.

Where to next?

  • We can no longer ignore later life care needs

    It’s time for the protection sector to step up and do more to support clients prepare for the future, writes VitalityLife Managing Director Justin Taurog.

  • Three real-life claims you might not expect to be paid

    VitalityLife Managing Director, Justin Taurog, talks us through three real-life claim case studies to remind us of the power of comprehensive severity-based cover.

  • Insights Hub

    Our Insights Hub brings your our range of adviser content - from video series to articles & blogs.

1 Cancer Research UK, accessed 2024
2 MacMillan, Living after diagnosis, median cancer survival times, accessed 2023
3 National Cancer Institute of America. Accessed 2024
4 American Heart Association. Accessed 2024
5 CIExpert Critical Thinking Report, 2024
6 VitalityLife Claims and Benefits Report 2023