Children’s cover is promoted by many insurers as one of the factors that most frequently lead to Critical Illness policies paying claims. For clients’ with, or planning to have, children it may be a very attractive feature. Legal & General’s announcement today continues the trend of providing clients with options as to the level of children’s cover they require. This will make them a more attractive option in some circumstances, but how do the changes being made mean Legal & General now compare with other insurers?
Over the last few years a number of insurers have added child specific definitions within their children’s critical illness cover. These range from congenital conditions – such as cerebral palsy, down syndrome, spina bifida and cystic fibrosis – to conditions more likely to affect slightly older children such as type 1 diabetes – average age of diagnosis is 14. Although these will not be offered in the standard Legal & General children’s cover, a range of child specific conditions will be offered if advisers select to add on the “children’s critical illness extra” proposition. Across the market there are twelve child specific definitions offered and Legal & General now cover eight of these.
Legal & General have also added a further four illness to their CI Extra option which are typically included within standard adult illness definitions.
Overall as can be seen from the table above Legal & General CI extra option now offers the third highest number of child specific conditions with eight included ahead of AIG and Scottish Widows with seven and Aviva Upgraded and Canada Life with six. All of these are however some way behind VitalityLife with ten and Royal London who cover twelve child specific conditions and also cover pregnancy complications making them a market leaders in this space.
At the same time Legal & General have reduced the minimum age of diagnosis for child to from birth within the children’s CI extra – it remains 30 days for the standard cover. Such reductions are starting to become more standard across the market although some insurers have yet to make such adjustments.
The maximum age that children are covered to differs significantly between insurers. Also some insurers vary the age children are covered to depending on if the child is still in full time education. Vitality currently offer cover to the oldest age at 23 for children in full time education, however if not in full time education they reduce this to 18. Legal & General’s increase in coverage to age 22 regardless of whether the child is in full time education or not means that they are aligned with AIG and Scottish Widows at the top of the pack.
The survival period offered depicts how long a child must survive after being diagnosed with one of the conditions before the insurer will uphold a claim. Clearly the lower the survival period the better and the market is split between offering 10 day and 14 day survival periods. Legal & General’s move to a 10 day survival period is an improvement on the 14 days they previously offered although in reality there are only a couple of conditions where this may be a factor.
Overall the changes to the Legal & General plan has brought it in line with the more comprehensive children’s critical illness offerings in the market although others in the market such as Royal London seem to offer more flexibility. It is welcome to see an insurer who have typically been at the budget end of the market offer more quality options. This builds on their recent addition of Red Arc to the proposition which suggest that Legal & General are looking to compete on more than just price going forwards. With more similar upgrades to the product, advisers considering both quality and price to gain a measure of value may see them as a more serious contender.
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