In a story in a leading finance industry newspaper, Dr Marius Barnard, one of the first to develop critical-illness products has criticised the UK protection industry for its lack of innovation. He has predicted that within 10 years, all critical illness policies will be assessed on the severity of condition or reviewed on exercise and health.
He believes that the UK needs a new generation of products, which work on staging- sliding scale payouts based not just on whether the customer has been diagnosed with a condition, but also on the severity.
These types of policies are increasingly popular in other countries. In the US, cancer has been graded as having four stages, the first making a 25% pay out, up to 100% for stage 4 cancer.
Policies give multiple payouts as the severity of the condition develops. Dr Barnard also believes that there should be a greater role for lifestyle discounts, where customers who take a healthy attitude to exercise and don't smoke receive much higher discounts than those who do.
Our view
Given the lack of profits made by insurers, of course there will be improvements in how people are assessed for cover.