The Association of British Insurers (ABI) has updated its minimum standards for critical illness (CI) policies that must be adopted by all insurers offering these products.
Changes have been made to how dementia, cancer and heart attacks must be covered within policies.
However, concerns have been raised that some of the changes may clash with the Financial Conduct Authority’s (FCA) incoming Consumer Duty as wordings may leave consumers confused.
ABI health and protection policy adviser Jakob Strandgaard set out the latest changes. They are:
Alzheimer’s disease
The definition for Alzheimer’s disease has now been expanded so it covers all forms of dementia.
It also includes what evidence is required to make a claim, and an updated list of the types of physicians or doctors who can make the diagnosis.
Cancer
The changes to the definition for certain types of cancer provide clarity for consumers on what is and is not covered, and reflect the latest medical developments and prognosis.
They are not intended to change the scope of what is covered.
The guide includes amendments to the definition of certain conditions, for example tumours in the urinary tract or digestive tract, but only in instances where the cancer is considered low-risk and the prognosis for the patient is very good.
Heart attack
The change to the definition of what constitutes a heart attack means that there is now more alignment between medical professionals and critical illness insurers.
The updated guide clarifies that less severe heart injuries, which are different to heart attacks, are not included in the minimum standards.
The difference reflects the death of heart muscle in heart attacks as opposed to the damaged tissue one would see after an episode of heart rhythm abnormality or a marathon run.
Discussing the wider process, Strandgaard added: “Advances in medical testing and treatment means that the prognosis for some conditions continues to improve, meaning what is typically covered by critical illness policies has changed over time.
“To keep pace with ever-changing medical technology, research and regulation, our guide is reviewed every three years.”
‘Confusion at best, contradictory at worst’
Protection Guru head of research Adam Higgs noted there were some positive aspects to the latest updates but warned there may be friction with the FCA’s Consumer Duty objectives.
“Positive changes have been made to include dementia alongside Alzheimer’s Disease and to allow diagnosis via ‘new diagnostic imaging changes’ within the heart attack definition,” he said.
“These changes however, are already covered as standard within new critical illness plans so are only likely to make a difference in the direct to consumer world where plans are generally lower quality.
“In other changes, the attempt to reflect updated medical practice and improve clarity over what is and isn’t covered seems to have added confusion at best and contradictory wording at worst.
“With Consumer Duty requiring firms to provide improved communications and documentation to consumers we would encourage any insurer implementing these changes to carefully consider how their own changes are worded.”
The updates apply to new CI policies purchased by customers from 16 September 2022.
The full ABI Guide to Minimum Standards for Critical Illness Cover can be downloaded here or from the ABI website.
