Critical illness that can meet your clients’ needs
We are all different and that’s what makes our protection needs unique. In this article, we explore the benefits of Zurich’s critical illness proposition through a number of hypothetical case studies to give advisers an illustration of how the cover can be fit for purpose for your clients.
As an industry designed to foster financial resilience, it is only right that the financial services sector revolves around the consumer. Delivering good client outcomes lies at the heart of every advisory practice.
Improving customer outcomes was the key driver in the development of Zurich’s critical illness proposition. It also underpins the Consumer Duty, which aims to provide fairer, more consumer-focused outcomes for the customer.
Both product providers and intermediary partners have an important role to play in ensuring customers receive products and services that meet their needs, are fit for purpose and offer fair value.
Ideally, this should be at the point of sale and throughout the customer’s lifetime. That is why Zurich’s critical illness cover is flexible to enable it to bend and flex to suit customer circumstances as they evolve.
Some hypothetical examples will serve to illustrate how you can create a package of cover for each client that is truly bespoke.
Brooke and Finlay
Brooke and Finlay are a young co-habiting couple. They have a dog, Tilly, and will soon add to their household because Brooke is in the early stages of pregnancy with their first child.
When she was ten, Brooke’s father was diagnosed with motor neuron disease. This triggered a very difficult period for the family both emotionally and financially. As a car mechanic, he soon became unable to work due to a weakened grip and difficulty picking up objects. Because he had no personal protection in place, the family was hit hard by the financial impact of the illness.
Brooke and Finlay don’t want to risk the same thing happening to their family, so they visit a financial adviser. She says they have been prudent to recognise the importance of putting in place a financial safety net.
As a young couple with relatively modest earnings, cost is important to them. The adviser recommends they take out a Critical Illness policy and Children’s Cover with Zurich.
The cover is competitively priced and provides a payout for many of the main conditions that customers are likely to claim on.
Crucially, she recommends the addition of Pregnancy and Early Childhood Cover, which is ideally suited to their situation because it covers a range of early childhood conditions, birth defects and complications of pregnancy.
The adviser quotes statistics from the charity Bliss on the number of children in the UK who need neonatal care each year because they have been born either premature or sick and highlights the hospital stay benefit that comes with Children’s Cover and premature birth hospital stay benefit that comes with Pregnancy and Early Childhood Cover.
She also emphasises that the cover will no longer be relevant once their child or any subsequent children turn seven. At that stage, Pregnancy and Early Childhood Cover can be removed and the premiums will fall accordingly.
If the couple’s budget allows, they may want to upgrade to the Enhanced level of cover for their child(ren) or increase the pay-out amount or both. They have full flexibility to choose the best solution at the time to meet their protection needs.
Timmy and Janet
Timmy and Janet are in their mid-to-late 40s. They have two children, Belle who is 12 and Sebastian who is 10. Both are higher earners working in the banking sector with annual salaries of £150,000 and £120,000 respectively.
Timmy’s father died last year and he received a substantial inheritance. He used most of it to repay their mortgage. He wants to make sure the rest of their finances are in good shape so he decides to consult a financial adviser.
The adviser discovers that they have protection in place in the form of joint life, life and critical illness cover. Their current provider says that children’s critical illness cover is included with the policy but the adviser knows that the cost of providing this is incurred by all policyholders, whether children’s cover is relevant to them or not.
Having undertaken a review of their needs and the protection market, the adviser questions whether they still need critical illness cover. They no longer have a mortgage liability and they also have generous sick pay schemes through their employer that provide a safeguard against them becoming unwell enough to work.
As higher earners, however, they want to protect against one of their children becoming unwell and them needing time off work to help get them better.
The adviser says Zurich has the solution for them. They can take out a life-only policy and add Children’s Enhanced Cover to it. They can choose a fixed payout amount between £10,000 and £100,000 for the children’s CI cover and this covers a child being diagnosed with one of 86 conditions.
He recommends they take the maximum amount of cover. If one of their children was to become critically ill, the loss of parental earnings could be substantial. He also says that if their circumstances change, they should revisit the package of cover, because the cover is fully flexible to change in line with their requirements.
Mike
Mike is a single man in his mid-20s. He runs his own graphic design business from the flat he has recently been able to purchase thanks to a cash injection from the ‘bank of mum and dad’. Although his parents are financially comfortable, he wants to stand on his own two feet and as a single-person household, recognises the need to protect himself from being unable to work.
He consults a financial adviser who emphasises the value of personal protection particularly for the self-employed, who lack the security of employee benefits. He recommends that Mike takes out critical illness cover and income protection to provide a secure financial safety net in the event that he is unable to work through illness or injury. Because he does not have a partner or children, life cover is not relevant for him at this time.
Mike has a good level of income but wants to balance the level of cover with the cost. The adviser recommends Zurich Critical Illness Enhanced. It covers a broader range of conditions and it includes cover for less advanced cancers.
Having a family member who suffered prostate cancer and was unable to work for eight weeks following surgery and a close friend who is currently undergoing treatment for bladder cancer that was thankfully detected early, Mike is only too aware of the incidence of cancer and the huge toll it can take.
Because Mike doesn’t have children or immediate plans to start a family, children’s critical illness cover is not relevant. And because children’s cover is an optional extra with Zurich, Mike is not paying for cover that he could never claim on.
Mike can rest assured that should his situation change and he does become a father, the addition of children’s cover is one of a wide variety of changes that he can make to his cover.
Heidi
Heidi is a recently divorced 38-year-old. She has a five-year-old son, Theo. She has retained the family home having agreed a settlement with her ex-husband to buy him out of the property. She has had to extend the mortgage term to make it affordable for her and is very conscious of the need to protect herself and her son against the unforeseen.
She wants to take out life insurance to cover the term of the mortgage. Being the sole earner in her household, she also wants to protect her income in the event she becomes unable to work due to illness or an accident. Finally, she wants to provide cover for Theo.
Her adviser suggests decreasing life to cover her mortgage, income protection to protect her income and a variant of children’s cover for her son. Having assessed the market for the best options for Heidi, the adviser recommends a multi-benefit package with Zurich because of the quality of the cover and the level of flexibility.
Heidi wants the best level of cover for her son, so she opts for Children’s Enhanced Cover and the maximum benefit of £100,000. The adviser tells her that she can switch to Children’s Cover and/or reduce the benefit amount if, at any time, she wants to reduce the premiums. This gives Heidi peace of mind that the cover will flex with her and her family as their needs change and budget allows.
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