The health cover that promises you more than cash

Will the offer of extra nursing care revive the ailing image of critical illness policies? Emma Lunn reports
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The Independent Online

Critical illness cover (CIC), an insurance policy that pays a tax-free lump sum on diagnosis of conditions such as those listed above, gives people peace of mind that, should the worst happen, they will not suffer financially.

But while insurers have in the past sold CIC purely as a financial protection product, they are now beginning to address customers' need for emotional and practical support in the event of a serious illness.

Some providers and brokers now offer an independent care advisory service as part of the cover. Patients making a successful claim on these policies will get access to nursing services in their own home, a range of medical treatments and counselling, as well as cash.

For example, depending on the individual case, services on offer could take the form of a house visit from a nurse or speech therapist; physiotherapy in the home; or counselling sessions. In the case of a terminally ill patient, families could also receive support from a bereavement counsellor.

The insurers Bright Grey, Co-op Insurance Society (CIS) and Swiss Life all now include care advisory services as part of any CIC sale. The insurance broker Lifesearch has gone further, and recently included them as standard on all its CIC, income protection and even basic life insurance policies.

"People expect more than a cheque in the post," says Kevin Carr of Lifesearch. "The payout is, of course, the first thing to focus on when you're diagnosed with a critical illness. But we've had feedback from claimants who say that access to a specialist nurse or counsellor is a huge benefit."

So how do care advisory services work?

Patients insured by Bright Grey and CIS, for example, will be assigned nurse managers from Red Arc, an independent care company. The cost of its services is met by the insurer or broker and built into their overall business costs - they say it doesn't translate directly into higher monthly premiums for customers.

Yet the bills are unlikely to be totally absorbed by a company looking to boost its profit margins. Inevitably, consumers will end up paying.

If you simply want a cash payout should you be diagnosed with a serious illness, shop around for a cheaper deal than those described above.

Other insurers selling CIC keep costs down by offering a telephone-based advisory service rather than help in the home.

CIC protection policies have recently come under a harsh spotlight. Some insurers have been accused of a lack of transparency in outlining exclusions to their policies and of failing to explain the benefits of alternatives such as income protection. Insurers have also proved reluctant to disclose the reasons why claims have been denied.

In April, Standard Life broke ranks by publishing details of cases in which it refused to pay out. One in five of its customers' CIC claims in the 12 months to 15 November last year were rejected - more than half of them due to the customer's specific illness not meeting the conditions of the policy.

A third of claims were turned down, the insurer said, because customers did not disclose crucial medical information when taking the policy out.

However, the industry body, the Association of British Insurers, did not welcome Standard Life's move. The ABI warned that this would lead to consumers trying to compare payout figures between insurers - a practice it said would not be "meaningful", since some have been offering CIC for much longer than others.

Offering additional help to customers in the form of care advisory services is therefore seen by some CIC providers as a way of restoring a tarnished image. Many customers who have claimed successfully on these enhanced policies are grateful for the benefits they offered.

Howard Tighe, 43, who was insured through Bright Grey, suffered a stroke in July 2004 that affected his speech, mobility and memory.

Mr Tighe received a payout of £75,000. In addition, Red Arc arranged for a neuro-physiotherapist to visit weekly for nine weeks to help him regain the use of the right-hand side of his body, which was paralysed by the stroke.

"When the policy paid out I thought, 'Is the money all I'm worth?'" says Mr Tighe, who has since made an excellent recovery. "But the service I got from Red Arc meant the policy was worth more. Without it, I wouldn't be where I am now."

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