Critical illness insurance quality & trusting advice

Friday, 20th November 2009 13:10 - by Resident IFA

I visited a corporate Client yesterday to complete the paperwork for their business life & critical illness insurance. The three company Directors were taking sensible steps to protect their business. To start off, I’ll explain the way I research solutions and products. Life insurance can largely be considered in price terms, but critical illness insurance needs a more beady eye cast over the policies on offer. This can include criterion such as: o Number of ABI (Association of British Insurers) specified critical illnesses covered. The ABI defines 23 critical illnesses. o Number of ‘other’ critical illnesses covered, over and above the ABI 23. o Number of exclusions i.e. circumstances in which the policy may not pay out. For the case in question, there was a handy co-incidence in that one of the provider’s who offered top-quality cover also ranked as #1 in cost terms. So, the Director’s required two policies each – one that combined £100,000 of life & critical insurance, the other £200,000 of life insurance only. The selected critical illness provider ranked second in life insurance cost terms, thus making an irresistible case for recommendation to issue both covers. On top of this, the provider offered a ‘Menu’ facility, whereby the two covers could be included within one plan for each of the Director’s, thus lowering the provider’s administrative costs. This led to an approximate discount of 3.75% per month compared to the premiums if the two covers were arranged separately – making for very cost-effective cover. Now, you could go online and source your own critical illness insurance, but will do well to match the beneficial scenario described above. In fact, I think the provider recommended only accepts applications submitted by Independent Financial Advisers (IFAs), to ensure that advice has been taken. Another shameless ‘plug’ for advice and IFAs! I had agreed action with the Director’s beforehand, but was asked if I had the cost-comparison to other insurance provider’s with me when I visited. I did not. I appear fortunate in that I tend to quickly build such a degree of trust with my Client’s that I almost take it for granted they implicitly understand that I will, at all times, give best advice to them. This experience acts as a timely reminder that people have every right to ask whatever questions they like of me and, to a degree, view me with a healthy amount of suspicion until I irrefutably prove my worth to them. After all, I am a terrible ‘griller’ when I purchase anything! Until next time...