Adam Higgs of Protection Guru on how our latest protection product updates will help to improve client results
Innovation brings opportunity for better client outcomes
There has never been a better time to fully embrace a less transactional form of insurance, writes Justin Taurog, Managing Director of VitalityLife
Why now is the time to sidestep traditional insurance
next generation insurance
Expanding protection to better meet the needs of clients
Discover more
Steve Allibone, Group Compliance Director for Vitality, explores ‘price and value’ and discusses how to deliver it in the right way
Consumer Duty: spotlight on fair value
Vitality Programme Managing Director, Nick Read, discusses Next Best Action, the latest data-driven and personalised evolution of Shared Value Insurance
Is personalisation the future of health?
“We’ve seen some product development in the life insurance market in recent years, but traditional forms of protection have stood still”
Individuals and households across the country are seeing their financial resilience being tested, while the health and wellbeing of our nation is still under strain. At the same time, advances in medical science and technology are transforming our everyday lives and driving innovation, especially within healthcare. In light of these trends, it’s no longer enough to only support the life of a customer if a claim needs to be made. Tangible value can be generated though regular touchpoints which can meaningfully improve the lives of clients from day one and help to deliver better long-term health outcomes. Not only is this good for everyone - it is the future of protection.
At a time when the UK is facing numerous social challenges, from the ongoing cost-of-living crisis to immense pressure on the NHS, there has never been a more relevant time to go above and beyond the scope of traditional insurance.
Welcome to the Next Generation Protection Hub.
We ultimately see the continued enhancement of relevant and timely protection products – that live and breathe with a customer - as the next generation of insurance.
Justin Taurog, Managing Director for VitalityLife
Vitality Launch 2023
Justin Taurog, Managing Director, VitalityLife
Better protection for your clients. Better support for you.
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Healthy food and lifestyle choices have a clear benefit to individuals, but what role does insurance play in helping prevent claims in the first place?
What impact can insurance have on healthy eating?
Child illness is a protection conversation that advisers cannot afford to ignore, writes Vitality’s Adviser Editor, Rob Harvey.
Why children’s cover can no longer be ignored
CIExpert founder Alan Lakey discusses the evolution of the critical illness policy market over the last four decades.
Alan Lakey on 40 years of critical illness
We spoke to protection industry experts about why boosting client engagement is good for everyone, including advisers
The power of engagement and how it benefits advisers
“Consumer Duty will place a renewed focus on client engagement and when I consider the Vitality proposition, no one else on the market drives that high degree of engagement.”
Andy Walton, Protection Proposition Director, Mortgage Advice Bureau
For most insurers, risk is still assessed at the outset of a policy and treated as static. Clients only tend to interact with their insurer when something bad happens, and the individual, changing needs of a customer are largely ignored over time. Given the complex world we live in today, this approach is no longer enough. If the industry is to grow the protection market – and ensure cover stays in place long-term – products need to move with a client, as well as with the times. More than ever, protection can play an increasing role in tackling wider issues impacting society today by easing the healthcare burden in the UK. This can also allow protection to become embedded into everyday life. At Vitality, we’ve seen first-hand how daily interactions that incentivise and reward healthy behaviour not only improve the lives of our members and deliver tangible value. They generate newfound levels of engagement, and this improves persistency.
There has never been a better time to fully embrace a less transactional form of insurance, writes Justin Taurog, Managing Director, VitalityLife
Find out how Vitality has further enhanced and streamlined its protection proposition as part of its ongoing journey as a next generation insurer.
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As we do move away from a transactional approach to insurance, there is an opportunity for protection to move with the changing needs of a client, so it remains relevant. This is crucial, considering the always-changing economic, health and wellbeing challenges clients face. Take advances in medical science for instance. People are today much more likely to survive illnesses that in the past would have been fatal. More, meanwhile, are going on to develop secondary conditions (see below).
Relevant cover at every stage of a client’s life
This is the next generation of insurance…
We ultimately see the development and continued enhancement of relevant and timely protection products – that live and breathe with a customer - as the next generation of insurance. We believe this gives advisers a unique opportunity to support a client at every stage of their life – from enhancing their lifestyle while they are healthy to supporting them fully when they are not, into later life and beyond. Because engaging with clients in this way is good for all involved, our Shared Value approach to insurance is getting increasingly difficult to ignore.
1 & 2) Vitality Claims & Benefits Report 2022 3) National Cancer Institute, accessed 2021 4) Cancer Research UK, Nov 2021
That’s why, when it comes to providing cover for serious illnesses, protection is far more fitting if it gives clients the ability to claim multiple times. Or continue their cover beyond its term into later life, given that there is growing public awareness around the need to fund social care costs. To remain relevant, Income Protection, meanwhile, must flex to the needs of clients. And do more than just pay out in the event of the client falling ill and offer little or no value beyond that. Instead, it can serve to drive better outcomes for individual clients and society in general, by supporting healthy living - from illness prevention to better productivity to rehabilitation through recovery pathways at the point of claim, alongside genuine lifestyle benefits. Furthermore, with Consumer Duty on the horizon, an emphasis on good client outcomes and delivering fair value is only going to take on growing importance from a regulatory and compliance standpoint as propositions continue to evolve in this way.
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Those who are highly engaged with the Vitality Programme are, on average, almost 60% less likely to cancel or lapse their plan.
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Not only that. If a client is regularly interacting with their plan through multiple touchpoints - that are genuinely meaningful to them - they are much more likely to value the plan, over and above the core protection cover. When this involves positive lifestyle choices, they are also more likely to stay healthy. Alongside the obvious benefits of this to a client, regular interaction also helps to foster stronger relationships, not only between them and their insurer, but also with their adviser. This leads to additional opportunities and repeat business as well as client referrals.
Critical illness needed a rethink.
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of people survive cancer for longer than 10 years
One in five cancers are recurrences
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We sat down with Adam Higgs of Protection Guru to discuss how Vitality's latest protection product updates will help to improve the market
At the same time, the financial strain that clients experience following a diagnosis can have a significant impact, at any stage of their condition. This is only getting worse given the ongoing economic challenges. “There’s lots of costs associated with being ill, whether that’s travelling to appointments, to having to take time off work in order to get medical treatment,” Higgs explains. “Even when diagnosed with something that might not be life threatening, there are often still financial implications”. As survival rates for certain conditions also improve, we'll see an increase in reoccurrence or other co-morbidities arising. “People don’t just get ill and then get better and never get ill again,” Adam continues. “As with a lot of conditions that are covered under critical illness and Serious Illness Cover plans, cancer for example, it’s quite common that someone might get a stage one cancer that might progress onto something more severe.” In line with this, the ability to claim multiple times on a Serious Illness Cover plan is also envisioned to go further to support clients. Especially with Serious Illness Cover 2X and 3X, which are completely unique in the market, allowing clients to claim up to 100% of the sum-assured more than once (as many as three times with Serious Illness Cover 3X). This is particularly valuable given the difficulties clients are likely to experience should they try to obtain new cover after a critical illness plan has ceased following a claim.
The challenge of later life funding and social care costs is another issue that has been addressed by the recent Vitality protection refresh. According to Higgs, “this is a big societal problem at the moment”. With Vitality’s unique Dementia and FrailCare Cover now automatically included on all qualifying Serious Illness Cover plans, Higgs believes this is a prime example of how the industry can step up to tackle this issue. “This is a really positive opportunity for advisers. We all know we’re living longer. And now Dementia and FrailCare Cover extends the life of Serious Illness Cover.”
Tackling later life costs
Prevention, rehabilitation and product flexibility
When it comes to income protection, there is a growing recognition that prevention and rehabilitation are of increasing importance alongside the core benefit that pays a replacement income in the event of claim. Higgs agrees: “Prevention is really important for income protection plans. The healthier we are the less likely we are to fall ill.” The new Income Boost, that pays extra over and above the client’s core benefit for a period of 6 months in the event of a claim, based on their pre-claim Vitality status, is “positive” in Higgs’ opinion and “can be a real help” when it comes to encouraging healthy lifestyle choices. Helping people back into work after a claim is also vital. This is why the newly enhanced Recovery Benefit is now powered by Vitality’s private medical insurance clinical pathways for mental health, musculoskeletal and cancer claims.
Vitality Serious Illness Cover has been at the forefront of innovation in the protection market due to its unique approach. Recent enhancements and simplification to the proposition are designed to help advisers deliver more streamlined advice. With the three options – Serious Illness Cover 1X, 2X and 3X – the aim is to give advisers choice and flexibility for different client needs and budgets. Serious Illness Cover 2X and 3X have been designed to offer market-leading cover. “If we’re talking about likelihood of a pay out, Serious Illness Cover 3X is the most comprehensive plan in the market pretty much across all age ranges and genders,” explains Adam Higgs, product manager for Protection Guru. The unique severity-based approach of Serious Illness Cover in particular is designed to better reflect the growing trends in medical science, as well as the evolving needs of clients.
Adding to this, product flexibility is something Higgs is also key to delivering better client outcomes, especially given the upheaval in recent years in the way many of us live and work. Higgs sees improvements to Vitality’s Guaranteed Insurability Options, which in certain circumstances now allow clients to change the term of a plan or defer period, as well as the monthly benefit, as welcome too. Last but not least, while not new, the unique Vitality Earnings Guarantee – that allows clients to complete upfront financial underwriting – is another stand-out feature for Higgs. “It offers comfort that people are going to get paid out for exactly what they’re paying for,” he concludes.
Watch Adam Higgs' video review of Vitality's Life Launch 2023
"I think that the changes are really strong.”
Adam Higgs, Protection Guru
This is a view backed up by Higgs, who believes that “from a longer-term perspective”, Serious Illness Cover offers “a more sustainable approach compared to critical illness” and that the breadth of cover “takes away the lottery elements of critical illness and means that clients can be paid out in line with how ill they are”. Where in the past many critical illnesses would have either been fatal or resulted in permanent long-term health complications, people are now more likely to survive and experience better treatment outcomes.
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“One of the benefits that Vitality have is a health insurance arm and being able to draw upon that to help clients get back into the workplace is a really positive move”
1) BMC Public Health, The rise in the number of long-term survivors from different diseases can slow the increase in life expectancy of the total population. Marcus Ebeling, Anna C. Meyer, and Karin Modig, 2020
Building on the existing Financial Conduct Authority (FCA) Consumer Principles and adding a 12th overarching principle of delivering ‘good’ client outcomes, Consumer Duty is intended to drive improvements in financial products and services for consumers. At a time when budgets are stretched and consumers are rightly paying close attention to how and where they spend their money, the ‘price and value’ outcome within Consumer Duty is especially significant for our industry.
As we fast approach the implementation of Consumer Duty on 31 July, Steve Allibone, Group Compliance Director for Vitality, explores ‘price and value’ and discusses how to deliver it in the right way
This need to deliver real value and to remain relevant to clients is reflected in our recent Life Launch and many of the changes we unveiled. Our view is that products should help drive regular engagement from our members in a way that ensures they get value from day one and on an ongoing basis thereafter. This can support advisers in maintaining better long-term relationships with clients, whilst also helping with retention. Our own experience highlights that more engaged clients are less likely to cancel and therefore lose out on valuable cover that they might at some point need. As we innovate as a sector, advisers will also need to ensure they keep themselves up to date on new products and product changes. Delivering value to clients clearly requires a level of product expertise, which is why we provide extensive resources, such as our Vitality Academy, to help advisers fully understand the products and propositions.
Evidencing fair value
As well as this, to ensure we’re meeting the Consumer Duty regulations, all of us in the industry will need to adequately evidence that we’re delivering fair value to clients. The whole point of Consumer Duty is putting the client at the heart of your business and whilst most firms would probably state they are already doing that, they will need to consider whether evidence bears that out. Aside from the obvious things like having rigorous compliance processes in place, or the gathering of comprehensive management information (MI) to monitor performance (such as lapse rates), the culture of an organisation is also key.
A less transactional approach to advice
A good place to start is the FCA definition. The regulator defines value as the price the client pays for the product or service being reasonable, relative to the overall benefits they receive. The outcome is that products and services deliver fair value to consumers. Fair value will mean different things to different clients and doesn’t just mean the lowest premium or how many extra benefits a product offers. Determining what we might consider as fair value for a client requires an understanding of their individual needs and how an insurance recommendation delivers on those needs. The client therefore needs to be treated as more than just a sales transaction. I see this as being a big part of fulfilling the Consumer Duty requirements. It’s about adopting a more holistic advice process. Treating the client as an individual and moving away from a one-size-fits all approach. Client needs are not static either. Their circumstances change over time, so too might what they deem valuable from a product or service. Under the new Consumer Duty rules, it’s less likely to be enough to just set up a policy and forget about that client. Maintaining regular contact, to ensure the continued suitability of any insurance products they have in place, is going to become increasingly important.
As an insurer, we take a shared-value approach to insurance, which means members, insurers and wider society all benefit from engagement with their plan, which actively encourages healthy behaviour. Elsewhere in the market we see varying interpretations of what delivering value looks like for consumers, through what are often known as ‘added-value’ benefits. More than ever recently there has been a spotlight on value given the ongoing cost-of-living crisis. But what though does the regulator mean by ‘price and value’? How does this impact advice? How do insurance products deliver value? These are no doubt some of the questions advisers are asking themselves in the run up to the Consumer Duty deadline. We certainly are as an insurer.
A more traditional, transactional approach – where the client pays a premium and see little value beyond the promise of a pay-out if they claim – will carefully need to be re-evaluated in a post-Consumer Duty world as products continue to evolve. In order to meet the needs of customers, insurance products can – and should – remain relevant by responding to wider trends and developments happening in the world, while offering enough flexibility to move as their life changes. It is through this that we can unlock real value for consumers and ultimately deliver better outcomes overall.
Product design is key
1) Vitality Claims & Benefits Report 2022
“It is our belief that insurance products should deliver clients immediate value from day one, not just at the point of claim”
Steve Allibone, Group Compliance Director for Vitality
“An excessively sales-focused culture may be detrimental to ensuring clients are receiving fair value”
Adviser performance reviews and internal meetings for example shouldn’t just focus on sales targets and revenue generated through commission or fees. These offer a good opportunity to discuss and scrutinise the value of products and services, alongside whether the needs of their clients are still being met. Product providers can indeed play an important supporting role here, particularly in the surfacing of data to assess distribution quality. At Vitality, for example, through our approach to Distribution Quality Measurement (DQM), we work closely with our adviser partners to deliver data and insights that allow advisers to grow business in a bid to improve client outcomes. This might include ensuring cover stays in place following a claim, encouraging clients to engage so they stand a better chance of staying healthy, as well as supporting the process from the outset to make sure claims can be paid at the moment of truth. This in turn helps to build trust and drives up the overall standards in our industry. Ultimately so that everyone wins.
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Last year saw the introduction of ‘Next Best Action’ to the Vitality Programme. Whether it’s quitting smoking, losing weight or getting more active, Vitality now uses the information gathered during an online health review to guide a member towards a journey that is most suited to them. Not only that – it is then made easier to achieve through practical support pathways through a range of evidence-based support partners.
In this Q&A, Vitality Programme Managing Director, Nick Read, discusses Next Best Action, the latest data-driven and personalised evolution of Shared Value Insurance
Why is behavioural science such an effective way to encourage positive lifestyle choices?
Vitality has a very clear core purpose: to make people healthier and enhance and protect their lives. Based on the simple insight that incentivising members to adopt healthy behaviours unlocks value for them, for us as an insurer, and for society as a whole. We call this Shared Value Insurance. We all know that making healthy choices is not always easy, but our data proves that simple nudges through a structured behaviour change programme is highly effective. The Vitality Programme can demonstrate tangible impact on the health and productivity of individuals with recent data demonstrating the impact of the Vitality Programme on key lifestyle behaviours and life expectancy.
What is Next Best Action and why has it been introduced?
With personalisation becoming increasingly more sought after, we set ourselves a simple but profound challenge: to identify the one most important thing a member can do to maximise the number of years they live in good health. By predicting the most important action a member can take and providing the support they need to make that change, while incentivising it, we can significantly improve their health and unlock greater Shared Value. We’ve used data insights to create new outputs from the Vitality Health Review, which will now tell members the most important action they can take to add healthy years to their lives. Each recommended action corresponds to a curated health improvement experience.
To make all this even more meaningful, in some cases, a member’s status is boosted to Platinum as an incentive that allows clients to unlock richer benefits while more effectively encouraging behaviour change. We caught up with Nick Read, Managing Director, Vitality Programme, to hear more about how it works.
By offering personalised health improvement journeys, we're able to tailor pathways to an individual's specific circumstances to ensure it has the most positive impact on their health.
What journeys do you offer and how are they personalised?
Three simple steps to Next Best Action
Predict the most important action a member can take to add healthy years to their life.
Recommend a specific health improvement journey which provides the support and guidance for them to act through a curated pathway.
Incentivise them to take action through added points and status boosts which reflect the value of their individual health improvement.
What’s the science behind it?
We will be continuing to roll out to members the other signature experiences over the course of the next six months or so as we gain insight and learnings from what we have in flight. Going forward, we expect the Vitality Programme to evolve further as we increase levels of personalisation across all of its facets. We look forward to sharing this with advisers soon.
What does the future have in store for the Vitality Programme?
“The challenge we set ourselves was to identify the one thing that a member can do to maximise the number of years spent in good health”
Nick Read, Managing Director, Vitality Programme
“Members who engage in and complete certain Next Best Actions are awarded a status boost – all the way to Platinum in some cases.”
As with all Vitality Programme innovation and enhancements, this is deep rooted in behavioural, clinical and actuarial science. Next Best Action has a number of layers to it. Firstly, we’ve updated the science of Vitality Age to incorporate Vitality Healthspan – the number of years we are likely to live in good health. Our models today are fully calibrated to the latest Global Burden of Disease study and predict life expectancy, healthy life expectancy and risk of specific diseases based on an individual’s lifestyle behaviours. We also use advanced machine learning techniques and combine this with the science to make projections about changes in behaviour and future health outcomes. We can then reach into the data and determine the single action today that will have the biggest impact on the number of years that the individual will live in good health – a member’s ‘Next Best Action’. For each recommendation, there is a corresponding journey to support and guide members to take action. We’ve brought together new partners and we’re working with Vitality Coaches, clinicians, and more, to deliver these experiences.
1) VitalityLife Claims & Benefits Report 2019 2 & 3) Britain's Healthiest Workplace and Vitality People Study 2018-2019
Those who engage with the Vitality Programme on average:
Increase life expectancy by 1.5 years
Enjoy an additional 5.2 days of productivity time per year at work
Experience 14% higher job satisfaction
Our Vitality Healthy Weight Journey is a 12-week one-to-one coaching programme supported by a new partner, Second Nature: an evidence based sustainable weight management solution. Members will benefit from intensive coaching as well as a range of tools and content, and a welcome pack including Bluetooth weighing scales.
Our Stop Smoking Journey is a 12 week one-to-one coaching programme delivered by Quit Genius – a digital, CBT based smoking cessation experience. This also includes a range of materials and communications from Vitality to support the coaching journey.
Vitality has launched two journeys:
Learn more about how Vitality's Next Best Action can provide your clients with the one action that would have the biggest impact on their future health.
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1) VitalityLife Claims & Benefits Report 2019
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2) Britain's Healthiest Workplace and Vitality People Study 2018-2019
Protection products are traditionally transactional in nature, offering limited tangible value beyond a claim payment and few opportunities for meaningful engagement. For this reason, most clients historically treat plans as something they file away in a drawer and forget about. In recent times, however, this approach has needed to change to better meet people's needs. With regular engagement comes better client outcomes. This is not just good for insurers and their customers - because they are more likely to stay covered for longer - it also brings a range of benefits to advisers too. And means we stand a better chance of closing the protection gap.
It’s increasingly the case that clients like to feel like they belong to something and that they’ve got more than just a policy sat in a drawer. By helping clients to engage more regularly through health and wellbeing benefits and rewards, we can deliver a more meaningful experience for them and drive better outcomes. People see the value in things that bring them added benefits and people like a pat on the shoulder for doing well. It’s good to feel rewarded for looking after yourself, which is why I believe things like the Vitality Programme can be such a powerful engagement tool. It’s delivering something much more than just the expectation of a possible pay out on the client’s demise or an illness. No one takes out a protection policy wanting to claim on it, whereas if they’re interacting and getting benefits that can help them look after their health, I think these things are invaluable.
The key to driving better engagement is offering regular and ongoing touchpoints that are genuinely valuable to the client. This needs to happen almost immediately – from the very start of their plan going live, and the more this can seamlessly integrate into their lifestyle, the better. The Vitality Programme, which sits alongside a client’s core cover, helps ensure members can regularly track their activity, earn rewards on a daily basis and engage with a range of health and wellbeing partners through a digitally led offering. Whether it’s redeeming a coffee reward, visiting the gym or completing a health review, these day-to-day touchpoints help to foster a stronger relationship with the client, whilst also helping them to live a healthier, happier life. The evidence highlights how effective this approach can be at driving engagement, with Vitality members logging over four million app session per month and redeeming on average over 130,000 rewards each week.
"Having the right level of engagement is really important for persistency”
I’m a big believer in ongoing client engagement. Having the right level of engagement is really important from a persistency perspective. Where we can create opportunities for regular engagement, the client sees the value in the cover they’ve purchased on a more ongoing basis. Ultimately, we want to be advising on a product that clients buy into, that they understand and then don’t cancel. This is particularly important given the ongoing cost of living crisis, where there is a greater risk that disengaged clients cancel as they don’t see their cover returning value to them. The upcoming Consumer Duty regulations will also place a renewed focus on client engagement and when I consider the Vitality proposition, no one else on the market drives that high degree of engagement.
"Protection can offer regular touchpoints and integrate into a client’s life”
Lara Fascione, Retention and Adviser Service Operations Director, Vitality
"People like a pat on the shoulder for doing well. It’s good to feel part of something”
Angela Davidson, Head of Protection, Mortgage Intelligence
2023 marks the 40th anniversary of the first critical illness policy. Following the recent enhancements of Vitality’s Serious Illness Cover, Rob Harvey, VitalityAdviser Editor, sat down with CIExpert founder Alan Lakey to discuss the evolution of the market over the last four decades.
Today, more conditions are covered, and wordings are superior to what they were 10-15 years ago. Despite these overall improvements and the broader developments in medical science, the core design of critical illness insurance remains largely unchanged. With the exception in some cases of additional cover for less severe conditions, most policies still pay out in full and finish if the claimant meets the specific condition wording.
Alan: This highlights an important challenge and opportunity for the market. Only covering oneself up to age 65 or 70, or just covering the mortgage is no longer sufficient, because there is a greater need sitting behind that. For advisers, a key area of focus is looking at their client’s potential future situation and unique solutions like Dementia and FrailCare Cover are gaining greater importance.
The world has changed immensely in the 40 years since the launch of the first critical illness policy. Advances in medical science have improved survival rates for many once-fatal illnesses and there has been a steady increase in life expectancy thanks to access to better healthcare and rising living standards.
“The introduction of Serious Illness Cover, which was arguably the biggest innovation since critical illness cover was first devised, was a wakeup call to the market and served to ignite the market into its current position.”
Alan Lakey, CIExpert founder
Following the recent 2023 Life Launch Vitality products have now been added to CIExpert meaning that advisers can compare these plans alongside other products on the market and review the quality of cover available across SIC 1X, 2X and 3X.
Alan: In light of some of the trends discussed, the biggest challenge will be simplification, because critical illness plans have become very complex over the years and ultimately advisers and their clients just want to know they are covered. One of my concerns is that some clients are falling through the cracks, because they are diagnosed with a condition that causes a financial impact, but they cannot claim because it is not a named condition. Ultimately, what we’re trying to do is ensure people are covered as much as possible within their budget. Overall, the hope is that advisers in the market aim for product quality rather than recommend based on price. Vitality Serious Illness Cover is now available on CIExpert
Rob: You founded CIExpert over 12 years ago, why has it been one of the most significant developments in the critical illness space over the past 40 years?
Alan: It is a specialist tool that allows advisers to compare the quality of both current and historic critical illness plans. Where traditionally advisers would have relied on price or number of conditions to determine a recommendation, CIExpert provides detailed expert analysis based on policy condition wordings.
Alan: To remain relevant, products need to adapt and innovate. A severity-based approach to cover offers several clear benefits. Clients can be covered at the earlier stages of a condition, with the pay-out reflective of the severity and impact of that illness. This approach also provides cover for longer, with clients able to claim multiple times if their condition worsens or reoccurs, or if they are diagnosed with another condition.
Rob: How have things moved on since the first introduction of critical illness cover?
Alan: Longevity of cover will be very important to many consumers. Having claimed on a critical illness plan, the risk of claiming a second time is increased. Those people who have had cancer are more likely to get cancer again and it is the same with heart attack and stroke. Obtaining new cover after a policy has paid out and finished can be challenging, particularly if the claim was for a more serious condition such as cancer or heart attack. If a policy can simply continue and give clients the ability to claim a second or third time, this will be of great importance to those worrying how life will carry on after getting one of these illnesses. With Vitality’s new Serious Illness Cover 2X and 3X plans, clients have the peace of mind that even if they are paid out in full for a condition, they will still be covered and can claim the full sum assured again if something else arises. This is completely unique in the market and I anticipate 3X being at or towards the top of the table on CIExpert’s quality comparisons and 2X not far below. If a client is looking to provide not only a wide range of cover, but at the same time ensure their policy continues after a claim, then the new Vitality plans, especially 2x and 3x will enable them to do that.
Rob: As medical advances have increased the survival rates for once fatal conditions, there is an increased chance of people going onto develop secondary illnesses, is there a growing need for multiple claims?
Rob: Today, more of us are also living longer, but often in worse health, how do we tackle later life care?
Rob: What can we expect in the future from the critical illness market?
Find more about the recent SIC enhancement.
A degree of optimism bias can influence a client’s thinking about their own health and mortality, but understandably, parents simply do not want to think about something as awful as their child falling seriously ill.
When it comes to protection conversations, child illness can be an especially challenging one. However, given the potential financial consequences for parents, it is a discussion that advisers cannot afford to ignore, writes Vitality’s Adviser Editor, Rob Harvey.
Find out more about Vitality’s latest enhancements to Child SIC.
Children’s cover has often been treated as little more than a rider benefit on adult critical illness plans and offered in a similar way to additional cover conditions. Traditional insurance products often do not provide enough flexibility or adequate cover for children. The level of cover is usually limited to a percentage of the adult sum assured and capped at a certain amount. This can restrict choice over the amount of cover available and due to the costs that can arise when a child falls ill, it risks leaving parents without adequate protection. What is perhaps most problematic with the traditional approach to children’s cover is that clients can only access it by purchasing their own adult critical illness plan. In recent years, the industry has rightly placed an increased emphasis on the need for more clients to consider income protection (IP). Very few IP plans though provide any sort of protection in the event of the client having to take time off work to care for a sick child. Of course, a comprehensive package of protection benefits makes most sense. However, clients cannot always afford this, so may opt for income protection instead of critical illness, potentially leaving them without the choice of children’s cover if required.
Traditional children's cover options are limited
Pioneering children's cover
By offering children’s cover as an entirely separate stand-alone benefit, we can give clients much greater flexibility and better choice. Vitality’s Child Serious Illness Cover pioneered this unique approach and was a market-first in offering an entirely separate children’s benefit. The stand-alone product recognises that children’s cover is an important consideration and not something that should be treated as an added extra. Moreover, it means children’s cover can be offered alongside any adult plan, including Life Cover (Term or Whole of Life) and Income Protection Cover, without limiting access to just those clients purchasing adult Serious Illness Cover. This is especially important as it gives advisers the freedom to select a bespoke package of protection benefits - arranged through a Multi Benefit plan - that are most appropriate for their client’s needs and budget.
1) Children's cancer statistics | Cancer Research UK 2) Almost 3 million working days lost each year to care for sick children | Pavilion Health Today 3) The cost of caring | Family Fund 4) Crowdfunding for medical care doubles amid record NHS waiting lists | Private healthcare | The Guardian
“This can make children’s cover an especially difficult subject for advisers to broach with their clients, but the impact of a child’s illness on the family means this is not a conversation that can be ignored.”
Serious illnesses can affect adults and children alike. There are around 1,800 new cancer cases in children in the UK each year and although the survival rates are high, this can have a profound impact on the parents, both emotionally and financially. The biggest financial impact can be a loss of income for parents having to take time off work for hospital appointments and caring responsibilities. Meanwhile, the ongoing cost-of-living crisis has added to these challenges. Research has shown that almost three million working days are lost per year from parents caring for sick children and whilst employers are obliged to provide compassionate leave, there is no statutory requirement to pay employees who are off work caring for a loved one. Studies have shown that families raising disabled or ill children are facing serious financial hardship.
Rob Harvey, Adviser Editor, Vitality
Why is children's cover necessary?
Costs can arise in other ways as well. If the child is living with a chronic condition, long-term disability, or impairment because of their condition, they may require extra aid or even modifications to the home. Some parents may turn to private healthcare, particularly given the current pressures facing the NHS. Without private medical insurance, the costs of self-funding healthcare can often be very expensive, prompting some families to turn to crowdfunding to raise funds. All this highlights why it is essential that children’s cover is not neglected when discussing protection insurance with clients.
The amount of working days are lost per year from parents caring for sick children
million
Staggeringly, almost 90% of preventable illnesses – which make up around half of the UK disease burden – are solely to do with lifestyle choices. Even a 10% reduction in the UK would prevent the loss of 729,000 healthy years of life a year. In global health, the picture is not much better. In fact, the global health burden can be reduced by a whopping 37% just by improving dietary patterns and increasing physical activity levels alone. Healthy eating and positive lifestyle choices have clear benefits to society; and this means insurers – with the help of advisers – have the opportunity to help people live longer, healthier lives.
Life insurance can play an important role in preventing claims from occurring by effectively encouraging healthy eating. Here, we explore how
Learn more about the Vitality Programme and how happier and healthier clients mean better business for advisers.
Making healthy decisions is not always easy and it often helps to give people a nudge. There is also strong evidence that people who engage in one healthy behaviour, are more likely to engage in another. One study showed that exercise tends to be accompanied with positive changes in food choices and an overall improvement in appetite control. The study found that engaging in moderate to vigorous physical activity is associated with a lower desire for higher fat foods and a higher propensity to enjoy low-fat and lower calorie foods. The opposite was also found to be true, with inactive individuals having a greater desire for high energy foods as well as a greater susceptibility to food cravings.
Kickstarting a positive cycle
Healthy eating is a cornerstone of overall health
Vitality analysed the number of portions of fruit and vegetables its members consumed over a five-year period from 2017-2021 and the percentage of members following a healthy diet, based on their consumption of fruit and vegetables, disclosed in their annual health review, increased by 25% over that five-year period.
1) Global Burden of Disease database; Williamson, E., Walker, A. J., Bhaskaran, K. J., Bacon, S., Bates, C., Morton, C. E., ... & Cockburn, J. (2020) 2,3,5) Evolution of Healthspan and Lifespan, 1990-2019, Global and UK, Healthspan report, 2021 4) Beaulieu, K., Oustric, P. & Finlayson, G. The Impact of Physical Activity on Food Reward: Review and Conceptual Synthesis of Evidence from Observational, Acute, and Chronic Exercise Training Studies. Curr Obes Rep 9, 63–80 (2020). 6) Incentives and physical activity, RAND Corporation, Nov 2018 7) Vitality data, 2021-2023 8) Protective benefits of healthy eating, Vitality, 2022 9) Subject to a maximum spend limit, terms and conditions
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37%
The reduction in the global health burden by improving diet and physical activity
of preventable illnesses are solely to do with lifestyle choices
90%
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Insurance can really help people make better eating and lifestyle choices and Vitality member data proves this. The Vitality Programme is the world’s largest behaviour change programme linked to insurance. It works by giving people access to the tools, knowledge and incentives they need to improve their health. It has been proven to help drive increased levels of physical activity through the use of Active Rewards. Following the introduction of Apple Watch in 2016, Vitality analysed the impact of Active Rewards on levels of physical activity. The health and life insurer found that Active Rewards help to drive increased levels of physical activity. When combined with Apple Watch, the analysis showed members averaging 3.6 more active days per month and high-risk members having 5.7 more active days per month. As a result of the Programme’s construct, it has been shown to help improve a wide range of key lifestyle behaviours, including diet, as well as overall life expectancy. We analysed the probability of improving key lifestyle factors based on participation in the Vitality Programme. The study found that those engaging in the Vitality Programme amongst other things, record 22% more physical activity, eat 27% less fatty food and eat 11% more fruit and vegetables.
Data-driven proof
6
7
Smoking
Mental health
Fruit and vegetable cons.
Sleep
BMI
Physical activity
95%
68%
39%
30%
23%
20%
Source: Britian's Healthiest Workplace data 2018-2019
2017
Proportion of members meeting their fruit and veg intake over time
2018
2019
2020
2021
60%
69%
72%
75%
Target not met
Target met
In addition to increasing awareness around healthy food choices, we actively encourage our members to eat better through our healthy food benefit (available to members with qualifying plans ). This plan offers members who get physically active up to 25% cashback on healthy food purchased. Members with a qualifying health and life plan can get up to 40% cashback when they get active. If clients get physically active, other benefits include up to £10 off anything from Mindful Chef every week. Those who are at-risk of type-2 diabetes have the option to get discounted access to Second Nature, which offers a personalised healthy weight journey.
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The adherence to a healthy diet can have a huge impact on a person’s overall health and by reducing their risk of developing lifestyle diseases including heart disease, stroke, and type-2 diabetes. Following a healthy diet can also also positively impact mental wellbeing, both in terms of reducing the risk of developing mental health issues and helping those who are already suffering from mental health issues. By actively supporting and encouraging positive lifestyle choices, insurance can play an important role keeping people happy and healthy - as well as supporting them financially when they need it most.
70%
10%
Lifestyle improvement
5
Members who actively engage in the Vitality Programme:
Record 22% more physical activity.
Eat 27% less fatty food.
Eat 11% more fruit and vegetables.
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