Guardian has upgraded the additional payment conditions within its critical illness policy.
The percentage of the sum insured payable increased from the lower of £50,000 or 25% of the sum insured to the lower of £50,000 or 50% of the sum insured.
This equated to a doubling of the additional amounts paid for sums assured up to £200,000.
Low-risk non-melanoma skin cancer remained as before at the lower of £50,000 or 10% of the sum insured and Surgery Cover also stayed at the lower of £50,000 or 25% of the amount insured.
This is not a condition change and therefore the increase to the additional payment conditions is not being backdated to existing policyholders.
Guardian’s research showed that the value of additional payment conditions was not appreciated by consumers, primarily because most were unaware that they existed and did not realise that they allowed multiple claims.
When made aware of their existence, customers showed a far greater interest in taking out a plan.
Jacqui Gillies, marketing and proposition director at Guardian, said: “Additional payouts offer much needed financial breathing space and the ability to make lifestyle modifications or help fund additional treatment to those people who’re diagnosed with something critical, but not critical enough to meet a full payout definition.
“We know advisers like our crystal clear definitions and our approach to claims, however some partners were telling us that their clients would value a higher additional payout amount.
“This was also a theme that was echoed in CIExpert’s Critical Thinking Report.
“Listening to that feedback and after consulting with the team at CIExpert to assess the level of positive impact these changes would have on consumer outcomes, we’re delighted to be able to introduce them for new customers with immediate effect.”
Alan Lakey, director at CIExpert, said: “Our Critical Thinking 2024 survey of 5,000 consumers showed that the majority did not recognise that additional payment conditions were included in most plans; 81% of consumers didn’t think it was possible to make multiple claims for either adults or their children for less critical conditions.
“Interestingly, once that was explained, 36% said they’d be more likely to consider CIC in the future, which rose to 70% of Gen Z.
“This indicates that as an industry we too often assume that consumers understand our complex terminology and whilst this change is material to a client when making a claim, you have to wonder how many advisers would recognise the impact of this percentage change.
“Our comparison analysis takes these payment levels into account which is particularly important for comparison of decreasing plans, where the amount paid out will vary for each year of the term and requires an accurate reflection of the overall difference in value for the client.
“This Consumer Duty requirement highlights the importance of advisers explaining the valuable benefits of critical illness plans since it’s unlikely that most consumers would comprehend the difference.”
