Posted 16 Feb 2021

Children’s critical illness cover – want it or need it?

The team at iam|INSURED is incredibly proud to be working closely with Teenage Cancer Trust in 2021. This incredible charity provides vital support to cancer patients between the ages of 13 and 24.

We see this as an opportunity to help raise awareness for teenagers and young adults coping with a cancer diagnosis. Also, it is an opportunity for us to help increase awareness around children’s critical illness cover.

Children’s critical illness cover is an amazing product introduced to the protection market several years ago. This benefit provides critical illness cover to children up to the ages of 18 years for some providers and 23 years with others (depending on cover and education).

The reality is that should a family need to claim on a children’s critical illness cover policy, then we should be supporting them as best we can. Parents will dread to think about the possibility of their children becoming critically ill.

This type of benefit should be something that we promote more heavily as an industry, but there are limits to it.

Summary of cover currently available through standard insurance providers:

Provider% of sum assuredMaximum benefitMax. age (not in education)Max. age (in full-time education)Available with Life only
AIG CiC Start50%Up to £35,0002222NO
AIG YourLife PlanN/A£50k group 1 / £25k group 2 conditions2222NO
Aviva50%Up to £25,0002118NO
Aviva Upgraded ChildN/AUp to £25,000 (£50k for child extra care)2222NO
Canada Life50% / 25%£25k full payment

£25k additional payment cond.

2218NO
GuardianN/A£10,000 to £100,000. Payments between 100% and 25% based on the severity2323YES
Legal & General50%Up to £25,0002222NO
Legal & General CCIx50%Up to £30,0002222NO
LV=50%Up to £25,0002323NO
LV= Enhanced Children’s CI50%Up to £35,0002323NO
Royal London50%Up to £25,0002321NO
Royal London Enhanced Children’s CI50%Up to £50,000

Additional conditions up to £25,000

2321NO
Scottish Widows50%Up to £30,0002222NO
Vitality PPPN/A£10,000 to £100,000

Payments between 100% and 5% based on the severity

2318YES
Zurich (Core & Select)50%Up to £25,000

Additional conditions up to £25,000

2222NO

 

Summary

The reality of this table shows that most of these benefit options are fairly similar, however, there are some major differences.

Age limits are similar for most insurers, however, there are some who are clearly more flexible if your child is no longer in full-time education. Providers offering cover up to higher limits in this instance are AIG, Aviva (upgraded), Guardian, Legal & General, LV=, Royal London, Scottish Widows, and Zurich.

Maximum sum assured levels are fairly consistent across the board with most insurers on the standard cover. Guardian and Vitality both offer the highest levels of cover of up to £100,000, severity based.

Benefit limitations

The biggest limitation that we can see, especially for people with pre-existing medical conditions, is that only two insurers offer this benefit with life only. Every provider except for Guardian and Vitality will only allow you to add this benefit if you take out a critical illness cover policy.

Based on our experience in this area of protection, this excludes a significant number of people from taking children’s critical illness cover. We would like to see more insurers allow customers to add this benefit with life-only.

Daniel Sharpe-Szunko