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Group Critical Insurance: The Good, The Bad & The Pricing

Group Critical Insurance: The Good, The Bad & The Pricing

Group Critical illness, also known as employee critical illness or the ‘dreaded disease policy’, is one of the fastest-growing employee benefits in the market.

It currently holds a minimal market share compared to the other insurances, but this is constantly increasing. So, to help you decide if it’s right for you, here is the good, the bad and the pricing of Group Critical Insurance.

The Good

Group Critical illness cover supports employees with a tax-free lump sum if they are diagnosed with a critical illness or need an operation. The policy applies to any of the covered illnesses or operations set out in the policy.

Employees will be provided with a tax-free lump sum payment to help fund treatment, move to supported living, adapt a lived-in property or any additional services needed to live with an illness.

Insurers offer a wide range of enhancements for employers to choose from, but, usually, a minimum of 12 core illnesses are covered automatically.

Our favourite thing about Group Critical Insurance is that all providers will now include children’s cover that mirrors their parents’ benefit.

Additional support services covered by the policy include cancer support, second medical opinions and counselling sessions to help employees come to terms with a diagnosis.

Group Critical illness is currently the least popular of the employee benefit insurances (by market share), but we are seeing rapid growth in this area with the number of members covered currently sitting at 571,800; totalling £37.3 billion.

We will continue to see this area grow over the coming years, due to the sobering fact that 1 in 2 people in the UK will be diagnosed with cancer at some point in their lifetime. This is why we are expecting to see a continued focus on this area in the employee benefits space.

The Bad

As with all products at their growing stage, Critical Illness has a lot of work to do while it is still an evolving product.

Our team here at Hooray have been in discussions with major insurers on how we can look to enhance this product and provide the best cover to the UK marketplace.

Our main (well, only) bugbear against a Group Critical Illness policy is with the survival period that insurers impose in their terms and conditions.

So, for example, if an employee is diagnosed with terminal cancer, they would have to survive for a set time (usually 14 days) before they can get the benefit pay-out.

We understand that the policy is designed to support people surviving or living with a critical condition and Group Life Insurance is there to support families for death benefits.

Nonetheless, our personal view is that insurers have a duty of care to pay on the diagnosis of a critical illness. We would, therefore, love to see them waive such survival periods, as they seem an unnecessary exclusion – in our humble opinion.

If we consider how many people this will impact, it is minimal, but for those that do get diagnosed with a terminal illness and then pass away within the survival period, it is going to be absolutely devastating for their families.

This will likely be exasperated by feelings of being cheated by insurance companies and will add to the negative view that consumers have of the insurance industry.

Hooray Health & Protection will continue to lobby this to the market and will update this guide with any progress as we see the product continue to grow.

The Pricing

Due to the current small size of the Group Critical Illness market, there is no way to provide an average costing of a general policy.

However, there are factors which will impact pricing from client to client, which are (in no particular order):

  • The average age of the company’s employees
  • Location
  • Occupations
  • Any long-term absentees
  • Previous claims history
  • Levels of cover chosen

Our main pricing tip for Group Critical Illness would be to declare all insurance policies you already hold when reviewing your cover. This is because certain insurers who offer all three policies can provide multi-product discounts.

So, if you have Group Life Insurance, Group Income Protection or Group Medical Insurance, make sure you let your broker know. They will use the existing schemes to get a better understanding of your company’s ‘risk profile’, so also bear that in mind.

If Critical Illness Cover is something you’ve been thinking of for your business then feel free to call us on 01273 222805, or email [email protected]. We will never charge you for a review – whether it’s a new or current policy!

Charlie Cousins

Founder and Director of Hooray Health & Protection, Charlie Cousins has enjoyed a career in the insurance and financial services industry spanning over the last ten years.

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