It is fair to say that the raft of critical illness upgrades and changes made throughout 2018 left Legal & General somewhat behind in the comprehensive end of the market as a number of insurers broadened their cover beyond what was available through the CIx proposition. The latest changes announced by Legal & General today have clearly been designed to improve cover for clients and increase claims but where does this position them when compared against their peers?
Whilst wholesale changes have not been made, a number of definition wordings have been simplified across both the standard and CIx policies. Most notably 13 of the in-situ cancer definitions have been removed and replaced by a catch all “cancer in situ or neuroendocrine (NET) of low malignant potential” definition. Importantly, Legal & General have kept specific wordings for less advanced cancer of the breast, cervix, larynx, prostate, ovary, renal pelvis, urinary bladder and uterus. This is particularly good to see as generic wordings often do not capture the nuances of such conditions as our panel of medical experts explain;
“We have had previous concerns when other insurers have switched to a “one size fits all” approach, as they often lose coverage of some of the more aggressive forms of CIS, such as those found in the upper and lower renal tract. Thankfully, L&G have kept their previous wordings for these particular cancers and have therefore maintained good overall coverage.”
Across a number of conditions, Legal & General have looked to simplify by removing unnecessary wording that describes what is not covered, when the definition already explicitly describes what is covered. Examples of this can be seen within the aorta graft surgery, bacterial meningitis, parkinson’s plus syndromes, peripheral vascular disease, severe crohn’s disease, removal of one or more lobe(s) of lung and removal of urinary bladder definitions.
For older clients and particularly older males, the addition of a coronary angioplasty definition within the CIx proposition is big plus as this is a surgery that is increasingly being carried out to reduce the risk of heart disease. This is a high incidence condition that has been missing from the Legal & General policy until now although it is worth noting that this particular wording has specific caveats for payment, and some of the other leading insurers provide better overall coverage for this operation.
Another big change comes within the Primary Pulmonary Hypertension definition. Legal & General have made a bold move by removing the exclusion of “pulmonary hypertension secondary to any other known cause i.e not primary” which increase coverage considerably on what is a high incidence condition especially for women. Our panel of doctors were particularly pleased with this change and commented that “the previous wording only supported claims where no clear cause was identified. The new wording now allows for all forms of Pulmonary Hypertension, including secondary causes from lung and heart disease, therefore significantly increasing overall coverage.”
This along with the other changes, makes a significant impact on how both the standard and CIx propositions sit within the market for both males and females.
The graphs below highlight 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.
The following example is based on a 35-year old male taking out a 25-year policy:
The following example is based on a 25-year old female taking out a 25-year policy:
Another significant change made by Legal & General is an increase in the maximum percentage of the sum assured they will pay if a client successfully claims for an additional payment condition under the CIx proposition. Previously the maximum they would pay was 25% of the sum assured to a maximum of £30,000. This has now been increased to 50% of the sum assured to a maximum of £30,000. Whilst this seems to compare favourably with most of the market, in reality it only improves the amount a client would receive if they have a sum assured of below £120,000.
Below we have highlighted the amount each insurer would pay for additional payment conditions based on different sums assured. With the exception of AIG (50% to a max of £35,000), Aviva Upgraded (100% to a max of £25,000), Guardian (25% to a max of £50,000) and L&G CIx all insurers will pay 25% of the sum assured to a maximum of £25,000.
*Please note that some insurers will pay more than this if the condition is diagnosed before a certain age (see our specific insight on this here) or if specific conditions were the result of an accident. LV= also pay 12.5% to a maximum of £12,500 for a number of additional conditions and the amount Vitality pay will differ dependent on the condition and the severity of the diagnosis.
Over the last 18 months its has been argued that some insurers have made too many changes to their plan and some have even been accused of tinkering with their wordings without any real consumer benefit. It is our opinion that any changes made to plans that can potentially improve clarity or outcomes for clients are worthwhile and the changes announced by Legal & General today certainly provide that in abundance. The combination of broader definitions for some of the higher incidence conditions along with simplified wordings and potentially higher pay-outs for low sums assured make the Legal & General critical illness proposition one of the most compelling in the market.