28th March 2023

Single or joint life insurance

I am frequently questioned as to why I am a proponent of two single life plans rather than a slightly cheaper joint life critical illness plan.

Naturally I spell out all the usual arguments about potential for a double claim, about the survivor being able to continue their plan, personal independence and about being able to select different insurers based on their approach to underwriting. However, the main rationale is that males and females claims experience differs widely.

Recently I investigated the differing claims experience by trawling through a major insurer’s four year (pre-pandemic) claims paid results.  Those who believe that the male/female claims experience is identical will be dismayed to discover the facts.  The table below shows the five most claimed on conditions and emphasises the male/female disparity in graphic detail. 

The percentages in column two are the average for this particular insurer and whilst a useful guide to claims paid it fails to distinguish the substantial differences in the male/female claims reality.  

Cancer is responsible for over three quarters of all female claims yet represents just over half of all male claims.  Heart related conditions represent almost a quarter of all male claims yet a mere 3.2% for females.  The male claims experience for stroke is 122% higher than females whereas this is reversed when we look at multiple sclerosis claims.

Armed with this knowledge the astute adviser is able to focus his attention on the differences between the insurers claim wordings, something that is of importance but of paramount importance when comparing today’s plans with those of a few years back.

Advisers using the CIExpert system will already be aware that Guardian and Royal London pay out on diagnosis alone of less advanced cancer of the prostate, as does Vitality with a 10% payment.  Each year around 52,000 men are diagnosed with prostate cancer of which around 11,000 fall into the less advanced group. Typically 5% are treated meaning that other insurers will pay only 5% of the less advanced cancer of the prostate claims that Royal London, Guardian and Vitality will.

As of writing, Aviva remains the only insurer to have switched to the new ABI model wording for cancer which additionally allows for a less advanced cancer of the prostate claim to be paid at 100% of the insured sum if it has been treated by prostatectomy 

LV= innovates by making an immediate payment of £1,000 upon receiving a cancer claim.  This is not an accelerated payment but is additional to the actual sum of insurance.  

With heart-related conditions Aegon and LV= remain the only major insurers to insist on a median sternotomy (dividing the breastbone) whereas the others additionally allow the less invasive thoracotomy. Guardian and Vitality remain the only insurers to pay an angioplasty claim for treatment of any single artery.

With benign brain tumour all insurers now require some form of treatment, however not so long back both Aviva and LV= paid claims on diagnosis alone which should serve to correct the view that today’s plans are superior in every way.

Things are not always what they seem and the simplistic claims data issued by most insurers usually fails to show the major differences highlighted in the table.  It would be valuable to advisers if all insurers provided this in depth information.

Alan Lakey is founder of CI Expert

https://ciexpert.uk

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