When launching enhancements to products, Vitality are certainly not backward in coming forward. Their launch conferences are more akin to the launch of a new iPhone than insurance products but in my view that is certainly not a bad thing. At their conference yesterday, a new Coffee partnership, flight partner and credit card were all announced, but behind these there was also some significant enhancements to their serious illness cover. In this insight we look at some of these changes.
The upgrade sees four new conditions added to the plan (Severe Sepsis, Necrotising Fasciitis, Desmoid-type Fibromatosis and Myasthenia Gravis), with further changes to six existing condition wordings. These alterations range from a variation in the amount paid or severity grading to enhancement in the wordings and below we have highlighted some of the major changes:
As many will recognise, heart attack is one of the most claimed on conditions under critical/serious illness plans. Previously Vitality had three different definitions that paid a different percentage of the sum assured across four specified severity levels. Essentially the more severe the heart attack (and therefore heart attacks that have a bigger impact on a client’s standard of living) the higher the amount Vitality will pay, with the amount paid ranging from 25% of the sum assured at the lowest severity, to 50%, 75% and 100% at the most severe.
In a positive move, Vitality have decided to remove their “Heart Attack – of specified severity” definition which, unlike other insurers, required the need for characteristic ECG changes and rises of cardiac enzymes or troponins levels, that have generally been superseded by more precise high sensitivity versions of these tests in clinical practice. Importantly, the removal of this definition results in no loss of coverage. This, combined with an upgrade in severity level for the most generous “Heart Attack” definition, means that Vitality will offer two heart attack definitions which cover three severity levels and a higher payment for less severe heart attacks than was available previously.
*Please note that if booster is applied to the plan, Vitality will pay 100% of the sum assured at all severity levels.
Carcinoma in situ and Motor Neurone Disease
Recent market changes have also seen Vitality fall behind a number of traditional critical illness plans for a range of conditions as other insurers improved their coverage, in particular for carcinoma in situ’s and Motor Neurone disease. A range of insurers have added coverage for Gastrointestinal Stromal Tumour (GIST) and Neuroendocrine Tumour (NET) either as a specific definition or within a “catch all” carcinoma in situ definition, whilst specific wording to cover Kennedy’s disease and Spinal Muscular Atrophy is becoming more common place within Motor Neurone Disease definitions.
In a welcome move, Vitality have updated both definitions to include these conditions further increasing coverage.
Third Degree Burns
Whilst Vitality have previously covered third degree burns covering a far smaller percentage of the body than any critical illness plan, a weakness has been the absence of coverage for burns of the face. Vitality will now include specific reference to burns covering a percentage of the face along with coverage for the most severe second degree burns within their updated “skin burns” definitions.
There are four separate severities covered ranging from “20% of the body’s surface area or 25% of the surface area of the face” at the highest severity and paying 100% of the sum assured to “5% of the body’s surface area or 10% of the surface area of the face” which pays 15% of the sum assured.
Faster payment for 23 surgeries
Another very welcome change is the addition of the wording “The undergoing of, or inclusion on the NHS waiting list” for 23 different surgeries covered under the plan. This will enable consumers to receive faster payment if they require surgery, which could be used to pay for private treatment or home improvements if there are environmental changes that are required due to the symptoms of the condition. Of the 23 conditions, 18 are classed as severity level A to E and therefore covered regardless of whether comprehensive or primary SIC is taken out, with five graded as severity level F and therefore only covered under comprehensive SIC.
in Improvements for children’s SIC
If there was a big weakness in the Vitality SIC proposition compared to the more comprehensive critical illness plans, it was within children’s SIC. This was mainly due to the exclusion of Type 1 diabetes from children’s SIC, a condition that has increasing incidence particularly in teenage years. Moving forward, Vitality have removed this exclusion and will now cover children for this condition which vastly improves coverage.
In addition to the inclusion of type 1 diabetes, Vitality have also added a child hospitalisation benefit which previously only Aviva, HSBC and Legal & General offered. Whereas Aviva and HSBC only require a child to spend seven consecutive nights in hospital before qualifying and Legal & General pay for every night (not necessarily consecutive nights) within three months of being diagnosed with a qualifying critical illness, Vitality require the child to be hospitalised for 14 consecutive nights before they qualify. For every subsequent night spent in hospital Vitality will pay £100 up to a maximum of £3,000.
Dementia & Frailcare Cover Plus
The market has quite rightly reacted very positively to innovative Dementia and Frailcare cover launched by Vitality in October last year. In the latest upgrade, Vitality will take this a step further by offering Dementia and Frailcare Plus cover as an additional paid for extra. Like the standard Dementia and Frailcare cover (which remains as an optional add on at no extra cost) this enables consumers to extend their cover once the SIC plan ends and into later life to provide financial security in the event that:
• Residential or home care is required,
• They are unable to complete a specified number of activities of daily living,
• They have a severe stroke,
• They have advanced dementia or Alzheimer’s disease; or
• They are unable to perform at least 2 activities of daily living due to Parkinson’s disease.
For Dementia & Frailcare Plus consumers can carry forward 100% of the SIC cover up to £200,000 (this is limited to 50% up to £100,000 for standard cover) but will pay an additional premium from outset.
Overall the changes being made are very positive although It is a shame that, unlike previous upgrades, these changes will not be retrospectively added to policies currently in force. Vitality have reacted to the market in areas where other insurers had perhaps offered more and in some cases even simplified their definitions, which to many will be a huge step in the right direction. As identified above, for some conditions, standard critical illness plans are likely to pay more (certainly on the first diagnosis) however the addition of the booster will align payments to such plans. That being said, if the aim is protect a client against the financial impact of becoming not just “critically” ill but “seriously ill” as well, no plan is as likely to pay a claim as Vitality.
To see how these changes affect Vitality’s overall SIC coverage visit qualityanalyser.com on Monday when the updates go live.