AIG Life has launched Key3, a critical illness insurance which pays a lump sum upon diagnosis of one of three key medical conditions – cancer, heart attack or stroke.
Key3 is designed to give customers simple, affordable and essential critical illness cover which can be bought with or without life insurance.
It was developed following research with intermediaries who said cancer, heart attack and stroke – which accounted for almost 80% of AIG Life’s adult claims in 2015 – are the medical conditions that customers fear most, and following testing with consumers who said they might be interested in insurance covering these key three medical conditions if it came at a lower cost than comprehensive critical illness cover.
Adam Winslow, CEO of AIG Life, said: “Key3 gives customers financial support to help them recover from cancer, a heart attack or a stroke. In our lifetime every other person in the UK will get cancer , while someone has a heart attack every seven minutes or a stroke every 12 minutes . Yet there is a huge market of UK customers who do not have critical illness insurance and don’t realise they need a financial plan in place if they fall seriously ill.
“This fills a gap in the market for customers who feel they can’t afford comprehensive critical illness insurance or who, like Generation Rent, do not own a home and are not prompted by a house purchase to look at how they will manage financially if they suffer from cancer, a heart attack or a stroke.”
And the launch has been welcomed by the protection industry.
Emma Thomson, head of customer care, LifeSearch, said: “It’s great to see AIG launching something new and it will be interesting to see how consumers respond. The critical illness market has become complex over recent years as more and more conditions have been added. Focussing on the core three conditions that people claim on the most, in order to simplify the decision making process, will hopefully help engage consumers and indeed some distributors who have been put off critical illness cover in the past. Cost is expected to be about 30% cheaper than a standard CI policy which should appeal too.
“I think it will particularly help consumers who are buying non-advised, some of whom might be overwhelmed with complicated documentation covering 50+ illnesses and who stick with life cover only as a result. I believe it will have less appeal to advisers who are already regularly discussing critical illness with their clients, because it is unlikely to offer the best value cover and I expect most advisers will continue to recommend traditional CI policies to provide greater peace of mind. But even in this space, there are likely to be some clients for whom this could be a useful alternative; those on a tight budget who don’t want to reduce the sum assured to bring down cost.
“I applaud AIG for being innovative and hope it helps more consumers benefit from some critical illness protection, who after taking this initial step may be encouraged to buy more comprehensive cover in the future.”