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 assured | Maximum benefit | Max. age (not in education) | Max. age (in full-time education) | Available with Life only |
| AIG CiC Start | 50% | Up to £35,000 | 22 | 22 | NO |
| AIG YourLife Plan | N/A | £50k group 1 / £25k group 2 conditions | 22 | 22 | NO |
| Aviva | 50% | Up to £25,000 | 21 | 18 | NO |
| Aviva Upgraded Child | N/A | Up to £25,000 (£50k for child extra care) | 22 | 22 | NO |
| Canada Life | 50% / 25% | £25k full payment £25k additional payment cond. | 22 | 18 | NO |
| Guardian | N/A | £10,000 to £100,000. Payments between 100% and 25% based on the severity | 23 | 23 | YES |
| Legal & General | 50% | Up to £25,000 | 22 | 22 | NO |
| Legal & General CCIx | 50% | Up to £30,000 | 22 | 22 | NO |
| LV= | 50% | Up to £25,000 | 23 | 23 | NO |
| LV= Enhanced Children’s CI | 50% | Up to £35,000 | 23 | 23 | NO |
| Royal London | 50% | Up to £25,000 | 23 | 21 | NO |
| Royal London Enhanced Children’s CI | 50% | Up to £50,000 Additional conditions up to £25,000 | 23 | 21 | NO |
| Scottish Widows | 50% | Up to £30,000 | 22 | 22 | NO |
| Vitality PPP | N/A | £10,000 to £100,000 Payments between 100% and 5% based on the severity | 23 | 18 | YES |
| Zurich (Core & Select) | 50% | Up to £25,000 Additional conditions up to £25,000 | 22 | 22 | NO |
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.
Email: daniel@iaminsured.co.uk
Linkedin: https://www.linkedin.com/in/danielsharpe-szunko
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