A number of the larger insurers have recently launched online life and critical illness sites whereby customers can complete a full application without taking advice. Bright Grey have been the most recent company to announce their site.
Roger Edwards, proposition director at Bright Grey, said: "We need to recognize that a certain segment of the population is using the internet to buy protection without professional advice. This group chooses the Internet-only approach to buy and would not look to buy in any other way. Until now there hasn't been a product that offers life or critical illness cover specifically tailored to this group of people, where they can complete the whole process online.
Roger is quite correct. There are people who just want to do the whole process online without actually speaking to anyone or taking advice but at what cost? The main reason the insurance companies have launched these sites is due to the popularity of price comparison sites. It is true to say that life assurance has always been a rate driven product. There is only one reason it will ever payout so the cheapest premium is usually the best product to go for. You could argue that customer service comes into the equation, which might mean that someone chooses a slightly higher premium based on an outstanding customer service record. However, most people applying over the internet would not know which provider had the best customer service or the quickest claims settlement history.
Critical illness, on the other hand, is not a rate driven product as far as professional advisers are concerned. The differences in cover between two providers can be vast even though they might both offer the same premium. Also, customer service and claims settlement history do come into the equation for an adviser when recommending a policy.
Critical illness cover has improved over the years and life assurance companies now payout more than ever thanks to an understanding of the product from advisers which is then passed on to policy holders. The Association of British Insurers (ABI) has published a standard definitions guide which clearly describes what is required to make a successful claim. Making critical illness a rate driven product with no advice could potentially damage the good work that has been done. There could be more cases of insurers not paying out due to non-disclosure at the point of application. This would only damage the reputation of the product and make future sales harder.
From an advisers point of view I would say that critical illness insurance is something that should be advised. If you are intending on paying premiums for insurance the least you should do is know what you are paying for regardless of what the premium is.
Martin Cavana writes for Life and Critical Illness Cover and is active in promoting Critical Illness Cover to as large an audience as possible. Statistics prove that Critical Illness Cover should be at the forefront of peoples insurance needs but lack of understanding stops this from happening. Our company offers free Critical Illness insurance advice and free quotations.
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