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LiabilityRisk Management

Where are the Disability and Critical Illness cover innovations?

By: FRANCIS ALDRICH CFP® Technical Marketing Specialist at PPS

When it comes to innovations to disability and critical illness benefits, generally speaking there have been no ‘groundbreaking innovation to the actual products, as the principle behind these products is still relevant to the needs of clients in today’s market.

That said, the application of these benefits are constantly being extended to cater for new arising needs, such as a child’s education or illness of family members. Recently more insurers are increasingly focusing on how to enhance and expand the benefits their products offer to their clients; these enhancements include additional or expanded claims criteria, new claims categories and cover for children and the like.

A few years ago a lot of effort went into developing monthly disability benefits when we saw the introduction of additional ways to claim these benefits, for example should a policyholder become functionally impaired.

Although many of the current solutions in the market have the same features and additional benefits at face value, there are definitely key differences that brokers need to take note of. These differences can be found in the following ways;

• An additional benefit on one product might attempt to mimic the core feature of another product. In other words, something might be added to one product with the aim of partially fulfilling the core benefits offered by another product.

• The benefit might be the same but with differences in when and how much the benefit pays out. Thus, both products might have the same benefit but by looking closely, one can identify differences in the actual conditions covered, the actual amount it pays out and so on.

While it is becoming more difficult for consumers to differentiate between insurance providers’ different offerings, brokers play a crucial role in ensuring that their clients know and fully understand the value proposition and benefits that the product they purchase will offer them.

With regards to innovations from PPS, towards the end of 2014 the company launched an optional benefit on its Sickness and Permanent Incapacity benefits, which will pay out should the policyholder’s spouse or child(ren) be hospitalised. In March 2015 PPS launched a new Sickness and Permanent Incapacity benefit that offers more choice in terms of the benefit waiting period, premium patterns and retirement age.

At the beginning of 2016 the company launched a new Critical Illness benefit with new claims categories, revised definitions, an optional benefit that boosts payments to 100% and a benefit that provides cover for children. Finally, during September 2016 the company also launched an Education Cover policy which provides cover for the cost of the policyholder’s child (or children’s) education, and cover options include death, disability or severe illness.

Future trends within this space are quite hard to predict as the purpose of this insurance is to cover the needs that exist currently in the lives of our clients. The current selection of products that are available on the market is also very good. However, should new needs arise or clients’ needs change, the products will certainly keep track with the changing market, be it through enhancements or complete new benefits.

Every type of insurance product has a core design and reason to be within a client’s portfolio and it is always important to ensure that the right products are contained within a client’s tailor-made portfolio.

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