LV= has launched a simpler version of its life and critical illness (CI) policy.
LV= outlined the move in an interview with Health & Protection in October where the insurer revealed it was planning a simplification of its critical illness (CI) product line to allow a more flexible approach for advisers and their clients.
The new budget plan covers 41 conditions, including 39 full payment conditions and two additional payment conditions for early stage breast cancer and prostate cancer of up to £30,000, or 25% of the amount of cover if lower.
It also includes enhanced payments for nine conditions including blindness, loss of hand or foot, or third degree burns. LV= will pay 50% on top of the initial cover, limited to £200,000, if the condition was caused directly by an accident.
Children’s cover is not automatically included but is an optional extra to protect all children up to age 23 for an additional premium, for up to £35,000 or 50% of the amount of cover under the main policy, if lower.
Customers can add this to their policy at outset or a later date, and can remove this at any time as their family situation changes. Children’s cover can be added to an existing policy, provided it has at least five years left to run. Once removed, it cannot be added back on to the same policy.
The product also includes LV= Doctor Services which offers access to a remote GP 24/7 and second medical opinion.
LV= previously offered just one comprehensive critical illness product, covering 87 conditions including 49 full payment conditions. This remains in place and has now been renamed to Life and Enhanced Critical Illness cover.
The new cover and the existing enhanced version are both included within the LV= Flexible Protection Plan, and can be combined with other types of life insurance and income protection products.
‘More relevant and tailored coverage’
Justin Harper, propositions and marketing director at LV=, (pictured) said: “These latest improvements to LV=’s critical illness proposition allow advisers and their clients to select more relevant and tailored coverage for their needs.
“Conditions such as cancer, heart attack or a stroke can have a devastating financial and emotional impact on families. By focussing on the most claimed-for conditions, we are launching a more budget-conscious alternative to our enhanced version.
“We’re also offering more flexibility around children’s cover, giving clients the option to add and remove this at any time – helping them achieve financial resilience as their lifestyles and priorities change.”
Harper added that LV= research found 77% of 25-44 year olds had increased awareness of their own physical health due to the pandemic but despite this, only 22% owned a critical illness product, with cost being cited as a major reason.
Second string to its bow
Alan Lakey, owner of CIExpert, said that having this second option would ensure LV= plans will appeal to all facets of the adviser market from the ‘sell it cheap ‘ brigade to those who focus on value and quality.
“Having child critical illness as an option enables the provision of comprehensive child cover while retaining a low cost for the basic plan, this could prove to be an important differentiator,” Lakey said.
However, Lakey criticised LV= for failing to easily differentiate between the new plan and the existing high quality plan.
“This new budget plan is called Life and Critical Illness whereas the current comprehensive version is to be renamed Life & Enhanced Critical Illness. The various portals will use different terms which may confuse advisers initially,” he said.
“Perhaps the using the term ‘Core’ for the basic plan might have been more descriptive?
“Nonetheless, this plan will be an important player in this segment of the market, particularly when the superior child cover is included.”
