A representative sample of IFAs will take part in the project during October and November.
Legal & General, a leading provider of CIC in the UK, believes this research is vital to the future of the critical illness market and will ensure the products developed are sustainable and meet the product needs of IFAs as well as their clients.
It is widely felt that the current generation of CIC products is under threat from medical advances which may lead ultimately to their withdrawal from the market. Many reassurers have stopped offering guaranteed rates indicating their general view that the uncertainty presented by today’s CIC products is too great.
The risk posed to insurers of fixing premiums for up to 25 years or more continues to rise with the result that prices of guaranteed CIC products, which have already increased steadily, will be forced up further. Should some providers withdraw from the market, the remainder may be forced to raise their prices still further to cope with the added risk provided by a smaller pool of insurers in the market.
Legal & General has therefore initiated this important research programme among IFAs to address key issues in the market and to develop jointly with them the new generation of affordable products that meet the needs of customers and the expectations of IFAs. Some of the issues that IFAs will be asked to comment on include future product concepts, the importance of the ABI statement of best practice for CIC, the use of common agreed definitions for core illnesses and the point at which guaranteed prices are felt to be too expensive.
Legal & General’s research project will be undertaken by Quaestor, an independent research agency. The company expects to publish the results of its research by the end of the year.
Graham Newitt, Protection and Housing Director said, “Critical Illness cover fulfils an important and growing protection need particularly in the housing market. As survival rates improve, the need for CIC will increase. It is vital for the future of the market that we deliver products that are both sustainable and affordable.”
“Critical Illness has come a long way since it was launched into the UK in the 1980s. However, as happens in many fast growing markets, a time for realignment has arrived. The products must now evolve to meet the needs of today’s customers and advisers. Our research programme provides a springboard for that and for the market to move forward in an informed way.”
The research, which by its nature is in depth given the significance of the topic has already been piloted among a number of IFAs to ensure the right issues are addressed in a manner that IFAs can comment on objectively with relevance to their businesses and clients.
As a token of appreciation, Legal & General will donate £5 for every IFA who takes part in the research to a Cancer charity.
