Lumley rolls out new risk product
LIFE insurance group Lumley has launched a new critical illness product in an effort to tackle the issue of the rising costs of trauma insurance.
The new product, simply named Lumley Critical Illness Insurance, will differ from existing life insurance products by seeking to provide tighter definitions of critical illnesses that trigger insurance policy pay outs, according to Lumley director and deputy chief executive Frank Smith.
“At present, a person can have a minor heart attack and receive a full pay out, but there are problems with this type of product because premiums are not sustainable as incident claims increase,” Smith says.
“The only other option has been to drop the level of cover in the insurance product, but with a tighter definition of what is a critical illness, we can maintain the cover and remain affordable.”
The policy will do this by limiting the initial pay out to 25 per cent of the insured amount on diagnosis.
However, if the medical condition worsens, such as a second heart attack or spreading of a cancer, then the remaining 75 per cent will also be paid to the insured.
The group took two years to adequately create the new non-subjective definitions used in the policy, according to Smith.
The research was carried out in conjunction with actuaries, reinsurers, medical specialists and financial planners.
AUTHOR
Jason Spits
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