Just 42% of advisers say they would always suggest a client puts in place children’s critical illness (CI) cover before a child is born.
This is according to CIExpert’s Adviser Watch poll of over 260 protection advisers and mortgage intermediaries, which highlighted that almost half of all CI policies only offer children’s cover as optional.
However the survey revealed 19% of advisers would “always” and a further 36% would “sometimes” recommend an adult-only policy, even if their client thought they would have children further down the line.
These results were despite advisers unanimously believing children’s critical illness cover is important for clients who have children and 73% saying it was important to consider for clients that may have children in the future.
Only around a quarter of advisers thought it was better to put cover in place in advance of having a child.
These advisers also said they would never recommend an adult-only policy if their client thought they would have children in the future.
But 22% were unsure and said they would follow the compliance guidance available to them.
Importance of conditions
Notably, the poll found that 42% of all advisers were unaware that most congenital conditions in children are diagnosed at birth, and if children are not added to a CI policy until after birth, they may not be covered for these conditions.
CIExpert highlighted that some policies cover significantly more congenital conditions than others, such as cystic fibrosis, muscular dystrophy and cerebral palsy.
However only half the advisers (51%) said the range of conditions will always influence their policy recommendation and a fifth (18%) said the conditions covered had little or no influence on their client recommendations.
Insurers reducing automatic coverage
Alan Lakey, director at CIExpert, said: “While in recent years we have seen many insurers adding in a host of child-specific conditions to their critical illness cover – often congenital conditions – we have also seen a move away from child cover being automatically included as a number of insurers now offer it as a paid-for option.
“This has been known to raise compliance concerns, where a couple doesn’t yet have children, that they may be insuring a future event that may not occur, but if this is followed and it’s left until after birth, then the child will not be covered for the various congenital conditions that are generally diagnosed at birth and any pregnancy complications or a still birth may not be covered.
“The CIExpert Adviser Watch highlights the breadth of views and behaviours among advisers when it comes to children and critical illness cover. The vast majority appreciate the value of it, yet there appears to be some lack of awareness and understanding regarding the implications of leaving it until after birth.”