Call for new insurance product for seriously ill

Thursday 12th July 2012

A new protection product to protect seriously ill people who do not qualify for critical illness cover is needed.

The call has come from Anna Sofat, managing director of Addidi Wealth, who says: “It is a pity that the insurance industry has not come up with a protection product that could serve as a halfway house between critical illness and income protection.

“I have a client who was diagnosed with cancer and had critical illness cover, but who couldn’t claim because she continued working while undergoing cancer treatment because she ran her own business and felt under pressure to do so.
 
“But if there was a product which paid out, say, £25,000-£30,000 a year for two to three years, in the event of diagnosis of a critical illness, this would be much more useful to the client than the large one-off lump sum payable by a critical illness policy, and a lot cheaper too.
 
“A third-way product would also be beneficial because critical illness cover has become prohibitively expensive for many clients and income protection only pays out after a deferred period and for the period the client cannot work, penalising clients making the best effort to continue with their jobs.  
 
“The protection industry needs to move with the times and devise a product which reflects the fact that, with medical advances, the prognosis on many cancers and other critical illnesses is much better than it used to be and that people are not only surviving longer, but recovering more quickly.

“If they recover within six months, they often can’t claim on either their income protection or critical illness policies.”