In 2018 there were very few insurers that did not make changes to their critical illness proposition. So far 2019 has been relatively slow in comparison, however today sees Canada Life making their long-awaited move. With 37 new definitions, 27 condition wordings updated, and 1 condition moved from a partial to full pay out the changes are extensive but how does this impact their position in the market?

Of the 37 new definitions 10 are full payment conditions and 27 are partial payments with the majority of these being the less advanced cancers that most plans now cover. In terms of the updated definitions, 15 of these relate to full payment conditions and 12 to partial payment conditions.

No changes have been made to the cancer, heart attack or stroke definitions, however the existing wordings are broadly in line with the market leaders so no change was needed.

A big worry is the definition change for Coronary Angioplasty. Our independent medical panel’s assessment shows that a client is actually less likely to be able to claim based on the new wording when compared to their old wording. Below our panel have set out what the differences are:

The major difference is around the number of vessels that have been operated on. In their previous wording they cover one artery being operated on provided another has 50% stenosis. The new definition only covers 2 vessel treatments or specifies that if only one vessel is operated on it has to be the left main stem, which is fairly rare (I believe this is around 5% of cases).”

This results in a bit of an anomaly. For younger males – where a coronary angioplasty is unlikely to be an issue – the new Canada Life wording is broader, however for older males the new wording is less comprehensive. The graphs below highlights who is most likely to pay a claim based on our independent medical panel’s assessment of insurers’ definitions combined with age-banded incidence data. The age-banded incidence data along with the gender, age and term of the plan enables us to weight each condition based on how likely someone is to suffer from it. Therefore, those conditions that a consumer is more likely to suffer from have a far greater impact on the overall score than conditions that are rarer. This example is based on a 25-year old male taking out a 10-year policy:

This example is based on a 45-year old male taking out a 10-year policy:

Whilst coronary angioplasty is a high incidence condition for females it is not as high as it is for men and therefore the decrease in coverage has less impact on the overall likelihood of paying a claim. The removal of the requirement for breast cancer to be situated in the ducts of the breast and changed to any carcinoma in situ of the breast providing the tumour is removed by surgery, is a big positive. Also, the addition of a heart failure definition which has an increasing incidence as females get older, means that for females Canada Life have broadened their cover.   

The graph below highlights who is most likely to pay a claim based on our independent medical panel’s assessment of insurers’ definitions combined with age-banded incidence data. The age-banded incidence data along with the gender, age and term of the plan enables us to weight each condition based on how likely someone is to suffer from it. Therefore, those conditions that a consumer is more likely to suffer from have a far greater impact on the overall score than conditions that are rarer. This example is based on a 35-year old female taking out a 25-year policy:

In terms of children’s critical illness, the addition of cover for Type 1 diabetes, where there is particularly high incidence in the teenage years, has a dramatic impact on Canada Life’s score.

The graph below highlights who is most likely to pay a claim based on our independent medical panel’s assessment of insurers’ child definitions combined with age-banded incidence data. The age-banded incidence data along with the gender, age and term of the plan enables us to weight each condition based on how likely a child is to suffer from it. Therefore, those conditions that a child is more likely to suffer from have a far greater impact on the overall score than conditions that are rarer. This example is based on a male and female child both born today and being covered for a period of 20 years:

With the exception of Coronary Angioplasty the changes being made by Canada Life are positive. There are a number of conditions where they have added the ability to claim if the client is added to a UK waiting list for surgery, which means they can pay claims quicker. The Alzheimer’s and Dementia wordings have at last been combined into one “Dementia including Alzheimer’s” definition and clients’ will now receive payment of the full sum assured if they have their eyeball surgically removed. For females there is an improvement in coverage across all age ranges, it is just unfortunate that the change in Coronary Angioplasty definition has resulted in worse cover for older males.

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