Munich Re, a reinsurance company has stated a need for critical illness policies to be overhauled if they are to continue and provide the cover people need.
The reinsurer raised questions over the future of critical illness polices due to the continual advances in medical science and demands of the consumer.
At the moment critical illness policies cover the conditions set out in the policy document and the premiums are set at the time. Some insurance companies offer guaranteed premiums that will stay the same throughout the life of the policy. Others will offer reviewable premiums which will vary from year to year based on a number of factors, including the claims history of the insurance company.
Our View
Munich Re are arguing that with the advances in medical science, policies need to evolve. The upshot of this will be that policyholders should always be covered for the most up to date known illnesses. However, the premiums will reflect the conditions added to the policy and will generally rise and become more expensive.
Critical illness cover is valuable and can make life a lot easier financially, should a policyholder suffer illnesses such as heart attacks, cancer or stroke. Many companies are now getting into the critical illness debate and although cover is still available from many providers, a number have now stopped offering guaranteed premiums and have moved onto offering reviewable premiums only.