HSBC Life launches two critical illness plans

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Alan Lakey, director, CIExpert

‘Solid plan offering a wide range of conditions’ but HSBC will need to ‘work hard to convince advisers’

After entering the advised space with a life assurance proposition last year, HSBC Life has followed it with the launch of two critical illness products – critical illness and critical illness plus – both only accessible to advisers via UnderwriteMe. Each are available as a standalone plan or with integrated life insurance.

CIExpert director Alan Lakey said the model follows the trend started by Aviva “where a lower cost basic plan runs alongside a more expensive and more comprehensive version”.

The basic plan offers 38 named conditions, two additional payment conditions (for low grade prostate cancer and carcinoma in situ of the breast) as well as terminal illness and total permanent disability cover.

“The wording for Parkinson’s disease also encompasses Parkinsonian syndromes, of which multiple system atrophy and progressive supranuclear palsy are two, however HSBC include these as separate conditions whereas corticobasal degeneration, diffuse lewy body disease and Parkinsonism-dementia-amyotrophic lateral sclerosis complex, are not specifically named,” Lakey pointed out. “This should serve notice to advisers that the counting of conditions remains a pointless and misleading exercise.”

HSBC has included benefits such as up to 90 days immediate free cover for mortgage-linked applications and guaranteed insurability of up to £150,000 until age 55 for birth, marriage or  mortgage borrowing.

The verdict

Lakey, who described the plan as “solid”, said it is positioned as “high quality” but “without causing sleepless nights” to insurers “sitting at the peak of the quality table”.

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He added that its appeal for will be heavily dependent on pricing, administrative prowess and underwriting capability.

“By restricting child cover until age 30 days for their CI plus plan numerous birth-defect conditions such as hole-in-heart have been excluded and this compares unfavourably against most of the quality plans in the market who have shifted to birth to 22 without a full time education requirement,” said Lakey.

He also pointed to an obvious contradiction in terms. “One curious aspect of the critical illness plus policy is the inclusion of bladder removal due to carcinoma in situ of the urinary bladder. This is already covered within the less advanced cancer of the bladder condition which pays out purely on diagnosis, thereby rendering the inclusion of the bladder removal condition futile.”

Lakey concluded: “Advisers are often wary of insurers, particularly bancassurers, that have traditionally set out to gain direct to consumer business thereby placing themselves as rivals. HSBC will therefore need to work hard to overcome such a mindset and to convince advisers that they are a major player and not a temporary entrant.”  

100% Payment Conditions for both the Critical Illness and the Critical Illness Plus plans  

Aorta Graft Surgery

Bacterial Meningitis

Benign Brain Tumour

Benign Spinal Cord Tumour

Blindness

Cancer

Cardiac Arrest

Coma

Coronary Artery By-pass Grafts

CJD

Deafness

Dementia

Encephalitis

Heart Attack

Heart Failure

Heart Valve Repair/Replacement

HIV

Intensive Care

Kidney Failure

Loss of a Hand or Foot

Loss of Speech

Major Organ Transplant

Motor Neurone Disease

Multiple Sclerosis

Multiple System Atrophy

Open Heart Surgery

 

Paralysis of a Limb

Parkinson’s Disease

Primary Pulmonary Hypertension

Progressive Supranuclear Palsy

Pulmonary Artery Surgery

Removal of an Eyeball

Respiratory Failure

Spinal Stroke

Stroke

Third Degree Burns

Traumatic Brain Injury

Additional Payment Conditions for Core and CI Plus plans – Lower of £25,000 or 25% of the sum insured

Low Grade Prostate Cancer

Carcinoma in situ of the Breast

 

 

100% Payment Conditions for Critical Illness Plus plans only

Aplastic Anaemia

Brain Injury due to Anoxia/Hypoxia

Cardiomyopathy

Crohn’s disease (severe)

Liver Failure

Mental Illness

Necrotising Fasciitis

Peripheral Vascular Disease

Pneumonectomy

Syringomelia/Syringobulbia

Ulcerative Colitis

Additional Payment Conditions for Critical Illness Plus plans only – Lower of £25,000 or 25% of the sum insured

Aortic Aneurysm

Aplastic Anaemia (less severe)

Bladder Removal

Brain Abscess treated by Craniotomy

Carotid Artery Stenosis

Cauda Equina Syndrome

Central Retinal Artery/Vein Occlusion

Cerebral/Spinal Arteriovenous Malformation

Cerebral/Spinal Aneurysm

Coronary Angioplasty

Diabetes Type 1

Guillain-Barre Syndrome

Less Advanced Cancers of;

Anus

Appendix, Colon or Rectum

Bile Ducts

Cervix Uteri

Gallbladder

Larynx

Lung/Bronchus

Oesophagus

Oral Cavity

Ovary

Pancreas

Renal Pelvis

 

 

 

Small Intestine

Stomach

Testicle

Thymus

Thyroid

Urinary Bladder

Uterus

Vagina

Vulva

Significant Hearing Loss

Significant Visual Loss

Skin Cancer

Third Degree Burns (less severe)

Children’s Critical Illness Cover – Lower of £25,000/50% of sum insured & £25,000/25% for additional payments 

Child cover is automatically included in both plans starting from age 30 days until 18th birthday (to age 21 if in full-time education). For each of the two plans children are covered for the relevant adult conditions with the exception of total permanent disability and Diabetes Type 1.

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