Prudential has revealed details of its new innovative critical illness policy, Flexible Protection Plan.
It is available from selected intermediaries from July.
The core cover is serious illness cover and/or life assurance. If one or both of these is bought, the customer can then add other sections including; disability, unemployment, income protection. and serious illness for children.
The real innovation is the core "serious illnesses" cover. This is much wider than the traditional critical illness insurance. Payouts are linked to the severity of the illness and the financial impact it has on the insured's lifestyle.
By offering cover for serious illness, Prudential seek to avoid the problem of the high number of illnesses where traditional critical illness products turn down a claim.
While most Critical Illness policies cover between 25 and 35 illnesses, this new product covers 267 and therefore protects people at an earlier stage, with payouts ranging from 10% to 100%. It offers protection against 140 listed serious illnesses and over 50 disabilities.
Paul Cowman, Head of Protection, Prudential UK, says the product is "revolutionary" and "clearer and fairer when compared to what's gone before".
He adds: "Financial advisers want to recommend – and their clients want to sign up to – a policy that is fairer and clearer about what they can and cannot claim for. Many existing CI policies may only pay out if a condition is serious or very advanced. We will pay out earlier and possibly more than once for conditions that would be rejected by traditional policies. Customers need not be totally or permanently disabled to qualify for a payment with the result that losing one eye is, for instance, enough to trigger a payout and if the condition worsens further payments could be made."
This product offers an alternative to the normal 'all or nothing’ critical illness products, currently available.
Expect to see a lot of press comment where insurers publicly do what they always do when a competitor brings out a revolutionary product, appear to welcome it but seek to point out problems and pitfalls. Meanwhile, many insurers will be frantically working behind the scenes to develop their own version.
This is a welcome new product, which will help develop a generation of critical illness insurances that meet modern customer needs.