Critical illness policies vary so much from provider to provider and across continents. A standard critical illness policy in the UK can be very different from an American policy.
The life insurance industry has always been one where products are offered and you pay a set premium for them depending on your age and state of health. Have life insurance companies moved with the times though? Should they be asking what people actually want? If someone simply wants a policy to cover cancer why can’t they have this policy? Why do they have to pay for 30 other critical illness definitions they are not interested in? No wonder critical illness can be a hard sell.
Maybe life insurance companies need to change the way they offer products. They have the statistics so why not just offer a menu driven approach so that customers can pay for what they want? Why can’t someone have a policy that covers them for cancer, stroke and parkinsons disease? If one life assurance company offered this kind of menu driven approach how much extra business could they pick up just by listening to their customers?
No life assurance company in the world can design the best critical illness policy. That kind of policy can only be designed by those who will be paying for it so what would you want in your policy? What ideas could you pass on to make a better policy worth having? Please leave comments so that we can see how far this could go.
30. January 2010 at 5:24 pm
This is a really good idea. Need to bear in mind that the cost of covering Cancer, stroke and heart attack is about 85% of the cost in a CIC product that covers 30 odd illnesses – so leaving in one or all of these will not reduce the premium significantly – but what you describe would offer the ultimate in flexibility!
30. January 2010 at 6:02 pm
Thanks for your response Roger. The internet has given everyone access to the information they want. What this really means is that people now have ‘control.’ What the financial services industry needs to do now is to let people have that control they want. Advisers can spend all the time they want telling people that they ‘need’ advice but if someone decides that they want to spend some time on the internet and do their own research they clearly do not want advice, they want ‘control.’ What I am proposing here is that life assurance companies stop telling people what they can have but instead offer/ask people what they want. It’s a win win situation. The client has the policy that they designed therefore they’re are far more likely to keep hold of the policy longer. The life assurance company has picked up business from someone who might not have been interested in their proposition in the ‘old days.’
Advice will still be important so somehow advisers and life assurance companies need to work harder together than ever before. Anyone can start a blog now with a grudge about a company or product that can start a negative conversation. As long as advisers and life assurance companies work with each other this damage can be limited significantly.
The only way to survive now is to be a part of the internet conversation rather than trying to control it.