Meet the children’s critical illness innovator

Children’s critical illness (CI) has come a long way in recent years. It is something that Tim Lewis, Zurich’s senior proposition innovation manager, knows more than most.

He has been instrumental in driving real change in children’s CI cover (CIC) across the industry. In recognition of that, he was this summer named CIExpert’s Most Innovative Critical Illness Product Designer of the past decade.

We sat down with Tim to discuss how the product has evolved over the years and the importance of providers and advisers thinking differently about children’s CIC.

How has children’s CIC changed in the past ten years?

It’s seen a lot of innovation. When it was first added to policies in the 1990s it provided the same cover that an adult had but with a lower payout amount. Around ten years ago, providers started to innovate around children’s critical illness cover. The cover now looks significantly different and there’s a lot more choice and flexibility. Providers started adding conditions that children specifically suffer from. The first one was hydrocephalus, which is a build-up of fluid on the brain shortly after birth.

Conditions like spina bifida, muscular dystrophy, cerebral palsy and Down’s syndrome are now commonly covered. Another development is around congenital conditions and coverage from birth or sometimes from 24 weeks of pregnancy. In the past, claims were only possible from a baby being 30 days old.

So, cover is more comprehensive. Has that bumped up premiums?

As it’s evolved and become more innovative and more specific and offered more coverage, the relative cost of that portion of coverage has increased in relation to the overall premium. If we go back ten or 15 years, the proportion would probably be 1-2% of the overall premium. Whereas now, with all the features I’ve described, it could be up to 10% of the overall cost for a policy with £100,000 of adult cover. As a result of that evolution, some providers – Zurich among them – now offer the choice to add it or not.

Children’s critical illness cover is irrelevant to a lot of people so why should they pay for something they will never need? Whereby it is an optional extra, you only pay for the cover that is relevant to you. When your children are too old to be eligible for children’s cover – at age 22 with Zurich – you can remove the children’s cover from your policy and the premiums decrease for the remainder of the policy term.

What makes Zurich’s children’s cover stand out in the market?

You have choice and flexibility with our product. You can choose to have a standard policy or an enhanced policy. If you add children’s cover to a standard policy, and one of your children is diagnosed with any of the conditions covered by the policy, we pay up to £25,000 per claim per child.

Cancer is still one of the main causes of claims for children. Our standard children’s critical illness cover, like all products in the market, covers cancer. If you have an enhanced policy, you can opt for enhanced children’s cover.

This offers uplift benefits, which pay out up to £50,000 for cancer claims. An additional £25,000 can be claimed if there is no treatment in the UK for your child but an effective treatment is available overseas. We also offer a child continuation option – we’re in the minority in the market in doing this. Over the age of 16 and before the age of 22, a young adult covered under a policy can take out their own critical illness cover without any underwriting.

Speaking about children’s CIC isn’t easy. How should advisers approach conversations with clients on the subject?

Historically, when customers didn’t have the choice to add children’s cover or not, advisers weren’t compelled to have a conversation about it. It’s not a nice thing to speak about: have you thought what you’d do if you child became ill?

Those conversations are having to happen more and more now. Advisers have an obligation to provide recommendations based on each customer’s needs. And, in fact, it’s worth thinking about the customer’s needs.

The need for children’s critical illness is very different to need for adult critical illness. I need critical illness cover because if I get cancer or have a heart attack or a serious stroke, I want my mortgage to be paid off. If my child becomes seriously ill, I need time off my work to help make my child better. I would do anything to make my child better.

You have to think about it differently. By focusing on the different need, advisers may be more comfortable having those conversations. Someone like Karla Edwards at The Protection Parent is among a new breed of advisers using social media to generate interest in protection. Her purpose is to make sure families are protected. One of her recent posts was called ‘baby insurance’ and what she was talking about was children’s critical illness cover.

The evolution of children’s critical illness has focused on the need – how much we pay out and the conditions covered has been borne out of putting ourselves in the shoes of a parent of an ill child. We want to better meet our customers’ needs. Our ultimate objective is to continue to improve customer outcomes.