Posted September 16, 2020

When I speak with clients about critical illness cover, it can be hard to convey the complexity of the products sometimes, and why seeking financial advice instead of purchasing the cheapest plan online is important. We want products to be transparent and easy to understand but with broad policies such as these it cannot always be the case, and having an in-depth understanding of how covers work is crucial, never more so should you need to claim.

As one example of this, we could consider children’s critical illness cover. When looking online most policies will ‘tick the box’ for including children’s critical illness, but what does that actually mean?

If we compare AIG with Beagle Street for example, AIG would provide cover from birth, for 50% of the sum assured up to £35,000 whereas Beagle Street would start cover from day 30 for £25,000 up to a maximum of 25% of the sum assured. AIG would cover children’s specific conditions such as Down’s syndrome, cystic fibrosis, Diabetes Type 1, Spina Bifida etc which would not be covered by Beagle Street. AIG would also pay up to £70,000 if an effective curative treatment for a poorly child could only be found overseas. For a couple with a policy each, a payment of £140,000 could literally be life-changing in those circumstances.

Children’s cover not only starts at different ages, but ends at different ages. Aviva will cease to cover a child at age 18 unless they are in full time education, whereas LV and Guardian will cover to age 23 irrespective. The questions of what is an eligible child is another area to be considered; with natural children, step-children, adopted children, children where the assured is legal guardian and lastly children who reside with and are financially dependent upon the insured. Royal London appear to lead the way here with their flexibility of who they provide cover for.

Not every insurer will cover all of your children, which can be very important to convey to clients. Legal and General’s entry level critical illness plan for example only covering a maximum of two children.

Never more, with the increasing complexity of products and the ability to buy products such as this online has financial advice been more important.

Barry Jones, Director & Protection Specialist

Watts Mortgage & Wealth Managment