The ABI (Association of British Insurers) sets the manadatory definitions for Critiical Illness policies.

So, a Critical Illness policy will have 27 illnesses, all of which have a certian definition. Technically, that enables an IFA to advise on Critical Illness Insurance on a level playing field.

The problem for the insurance companies, is that if all illness definitions are the same, how do they fight for your business, other than on price.

Well, one way is for them to have a few extra illnesses – most insurers have more than just the 27 illnesses, most have over 30 and BUPA has the most at 39 (ignoring the Pru who have 100 and I’ll talk them about in a minute).

From there, I can run a list of critical illness policies, and then look for the best policy amongst the cheapest.

Another way, is to provide extra benefits – Bright Grey and AXA both have couselling services, advice services and BG even have MacMillan nurses available for cancer sufferers. So, if BG or AXA are amongst the cheapest, I’d recommend them over the cheapest ‘bog standard’ policy.

And, the latest way is the ‘ABI+’ definition. Bright Grey have just made another 3 (total of their 35 claimable illnesses ABI+ – meaning that the definition they use is easier to claim on than the ABI definition. So they say:

• Benign brain tumour – the requirement for permanent neurological deficit with persisting clinical symptoms will be waived if the benign brain tumour is surgically removed.
• Coronary artery bypass grafts – we’ve removed the requirement to use surgery to divide the breastbone.
• Heart valve replacement – we’ve removed the requirement to use surgery to divide the breastbone.

This isn’t just plain generousity, or market forces – take the last one, they hardly ever divide the breastbone these days, so removing this criteria makes sense.

So, now as an IFA, I keep an eye on the ABI+ lists…

Oh – I was going to mention the Pru – their serious illness list includes the ABI critical illness definitions, but also has 73 further illness that are claimable. In addition, many have ‘proportional payments’ so, for instance ‘total and complete blindness’ is the critical illness definition, but Pru would pay out half a claim for 1 eye being blind, or 10% claim for Tunnel Vision.

This policy is so far and away better, in my opinion, than regular critical illness insurance that I always discuss it with clients.