Better off dead? The need for critical illness cover

Gregor Sked: Hi, everybody, and welcome to another webinar from Royal London. I'm Gregor Sked, one of Royal London's Senior Protection Technical Managers, and I'm going to be taking you through today's session, which should last us around about 45 to 50 minutes. And I'd encourage you as we go through to please use the Q&A facility and send over any of your questions, which we'll follow up with afterwards.

So ‘Better Off Dead’ is clearly an uncomfortable title for a webinar, but it does get to the heart of what it is I'm going to try to explore today, and that is the important role of critical illness cover. Because when we build protection solutions, are we sometimes better at planning for a client dying than for them surviving a serious illness?

And that's the question that we're going to try to go into a bit of detail today, but it's also a question that I would say is relevant irrespective of whether you spend your time advising on mortgages, whether you do already advise on protection or if you are a pensions adviser, specialist, investment specialist, maybe you deal with wider financial plans for clients.

Because a serious illness can disrupt every part of a client's financial plan. So critical illness cover shouldn't just be a conversation that happens at one stage of life. There are lots of areas that we'll look at today where critical illness cover can add value. So today it is about making a stronger case for critical illness cover, not looking at it as an optional extra, maybe on the back of a mortgage sale, but actually part of wider protection portfolios that you're building or hopefully going to be building for clients.

So, we're going to take a little look at the needs, we'll talk about claims, and we're going to talk about some of the practical ways to help make critical illness cover more relevant to the clients that you're speaking to. But before we get into that, let's take a look at what you can expect from the session today.

So, we have three learning objectives as always to keep us on the straight and narrow and to make sure that you can track us today as some CPD. Now, those three learning objectives are to help explain the role of critical illness cover within the holistic protection plan, use consumer research, use claims data, use real-life examples to make critical illness cover more relevant, and lastly, identify practical opportunities to position and recommend critical illness cover. There we go.

So, let's get started. I'm going to start with what I would say is a bit of an uncomfortable truth, and it does sit behind the, the purpose of the session today, because most clients don't set out to build an incomplete protection plan, do they? They normally put something in place because there is something triggering that conversation.

It might be a mortgage, and they do understand that there is a risk and maybe that risk is something that they feel is very serious, which is what if I died? But death is, of course, only one of the events that could derail somebody's household financial resilience, and that could be a client that survives cancer. Maybe they survive a heart attack. Maybe they survive a stroke. But it doesn't necessarily mean that they immediately return back to the life that they once had. Their income, their financial position, all could be different than it was before. There might be months away from work. There might be additional household costs, change to childcare, maybe a partner needing to reduce their own working hours or actually maybe they need to look at using the savings that they've built up, and actually now those savings start to be depleted much quicker than they'd expected.

So, to get us started, I want to look at the problems that we're trying to look at today. What are we trying to solve? I'm not saying we're going to solve all the problems, but I want to just look at what it is as an industry we are trying to look at solving with regards to critical illness cover. And I think the best place to start is probably a little case study.

So here we've got Kieran and Joy. They have joint life cover, which they arranged when they bought their home. Something that might be very familiar to a lot of clients that you're speaking to at the moment. They do recognise that there would be a financial consequence if one of them died, so they took out that cover to meet that need.

Now, that life policy isn't a bad policy. It's not failed them in any way. It's just designed simply to pay in a different set of circumstances. However, what we can see here is that Kieran has suffered a severe heart attack, but he has survived, and that is obviously the outcome everybody would want personally.

But financially, the family may now be in a much more difficult position than their protection plan had anticipated. We can see here Kieran runs his own business. He runs a catering company. Now, his illness could have affected or may well is affecting his ability to work, the income that he draws from the business, and it might even be impacting the business itself.

Joy might need to be taking time away from her own work. They've got two young children. The mortgage still needs to be paid. Their normal household outgoings haven't disappeared.

If Kieran had died, that life cover would have paid out. Because he survived, it didn't. And that's the rationale behind the title of the session. It is, of course, not suggesting that anybody's genuinely better off dead, because they aren't. It's asking whether we build protection solutions which actually maybe leave families better provided for financially following a death than if they had survived a serious illness.

If the recommendation only included life cover, we've addressed mortality risk, but we've not really addressed the consequences of an illness or an injury. And then when we look at the likelihood of those different events happening, that gap becomes an even more difficult gap to ignore. So, I want you to have a little guess at some of the figures I'm going to ask or do a little reveal for.

And I'm trying to just get the idea here as to what are the likelihood of different life events happening? So, we know Kieran is 34. He's a non-smoker, and I'm going to be looking up to the period to age 68, maybe when he thinks he's going to stop working. Now what do you think the probability is of Kieran dying during that window between 34 and 68? What percentage likelihood is there that Kieran might die before he stops working at 68? Because we're looking around about the 6% mark.

Now, what about the chance of developing a serious illness? If we compare that with the likelihood of developing a serious illness, what do we think the percentage is of that life event happening? We're about 19%. And if we look towards the likelihood of being unable to work for two or more months, what do you think? About 24%.

Now, when those possible life events are brought together, the likelihood of Kieran experiencing any of those life events before age 68 is around about 42%. Now, of course, the figures that we're showing you here aren't intended to frighten clients. They're not a prediction of what's going to happen to Kieran as an individual. The value that these figures give is that they're there to make risk easier to discuss. Of course, clients will often ensure the event that they fear most rather than the event that they're most likely to experience.

Death is also the risk most readily associated with protection, and particularly when the conversation begins with a mortgage. And there are several insurers, including us at Royal London, that do offer risk calculators, and that can help you just bring these percentages to life. It can help you bring these risks to life with clients.

So rather than saying, "You should consider critical illness cover," or, "You should have income protection," what these calculators can help you do is just give the client a bit of view of the fact that there are several different events capable of disrupting the plans that they are building and the plans that you're working with them on.

Now, of course, the next step is about connecting each of those different events to an appropriate protection solution. Of course, life cover is there providing that lump sum following a death. Critical illness cover provides capital following a diagnosis of a qualifying illness. Income protection provides that continued benefit where an illness or an injury is preventing somebody from working, again, subject to the policy terms.

Now, no single product deals perfectly with every risk on the slide, so we probably should be thinking about a portfolio of protection, if you wish. And each of the covers doing a different job rather than expecting life cover or critical illness to carry the entire recommendation. And of course, identifying the risks is one thing, but the next question is how financially equipped are households to cope with some of these risks that we're looking at?

What we've got on screen just now is a little extract from Royal London's 2026 Financial Resilience Report. If you get a chance to have a look through it, I would encourage you to do so. There's some really powerful findings within there. We launched this back in July of this year, and within the report, what we've introduced is a phrase called the Financial Resilience Barometer, and that is introduced really to help examine how well different sections of the country, or at least different sections of the UK population, are able to cope with financial challenges.

Now, the report presents what I would say is a fairly mixed picture. Some demographic groups have coped better with financial pressures over the last 12 months maybe more so than others. Most sit within what's been dubbed the economically exposed category, but some groups do have a significantly more prominence within the financial vulnerable section there.

The phrase economically exposed is quite an important one for you as advisers to have a little think about because a household doesn't need to be immediately in financial difficulty to be vulnerable to a serious illness. Clients may be meeting their mortgage payments, they may be contributing to pensions, they'll be paying for childcare.

They might be maintaining what could be seen as a reasonable standard of living. But that position could very well be dependent on both incomes continuing, and I suppose that expenditure remaining fairly predictable for the future. Of course, a diagnosis can change both sides of that equation at once.

Income could be reduced just as expenditure begins to increase. So that's why the protection conversation shouldn't just be limited to whether a client can pay the mortgage over the next month. We do need to understand how long their existing resources would last if income reduced. Which savings might they have to use first?

What other financial plans could they be using or what other plans might need to be paused? Maybe what other plans might need to be scrapped altogether. Of course, savings could provide a useful first line of defence, but they may already be intended for other emergencies, maybe a household deposit, education, retirement, or other long-term objectives, something more exciting.

But ultimately, once we understand how economically exposed the household is, critical illness cover becomes less about this isolated product and actually more about how do we protect that wider plan that the client is trying to work towards. And I suppose as part of that assessment, one of the things we do need to think about is what are some of the additional costs that could arise alongside a particular illness?

And I think when we talk about the financial impact of a serious illness, of a critical illness, it is very easy to focus on income stopping, it is easy to focus on the mortgage becoming difficult to pay. Of course, both are very important, but they are only part of the cost. Some of the stats on screen are fairly powerful just to illustrate the, I think the scale of some of these additional expenditures faced by young people, by individuals, by families.

The first figure relates to young people with cancer. Now, this was found through some research done by Young Lives vs Cancer. What they found was that young cancer patients and their families faced almost £700 a month in additional expenditure following a diagnosis. Now, that could include travel to treatments, maybe hospital parking, accommodation, an increased heating bill, changes to food, maybe changes to childcare.

The middle figure, so this is from Macmillan Cancer Support, and what they found was about 83% of people with cancer experience some form of financial impact. And amongst those that were affected, the average impact was about £891 a month on top of their normal expenditure.

And of course, these aren't not just replacement costs for expenses that the household was already paying. These could be brand-new costs arriving at the same time that earnings are, as I said before, maybe already under pressure. Then we've got the example of different adaptations to the home, something that we often talk about when we talk about critical illness cover.

It's there to help make adaptations to the home. But what does that actually mean? What does it actually look like? Well, from the research done through the, the Habinteg Housing Association, what they saw was that the combined cost of installing a grab rail, a stair lift, and a wet room in an older or less adaptable property could leave somebody almost £27,000 worse off than somebody that lives in a maybe more modern home, more accessibly friendly home.

Now, clearly not every serious illness is going to lead to one of these costs, but the point is that diagnosis can create financial needs that are difficult to predict precisely in advance. And I think where critical illness cover offers a benefit with that lump sum of money is it gives a bit of flexibility because the client might use part of it to reduce their mortgage. They might also include some of that to fund treatments, maybe overseas treatments.

It could be UK-based treatments. It might be want to make plans to alter their home, pay for care maybe replace a lost income that they, you know, for a period of months if they're taking time away from work. Of course, on top of that, income protection can also help replace those ongoing earnings, but it's not necessarily going to meet some of the one-off large adaptation costs, for example, that the individuals could face.

Life cover can still remain essential for death, but it's not going to pay simply because an insured person's facing an expensive recovery. Critical illness cover is really there to create that separate pot of money really for that need.

And I suppose that brings me nicely onto how do we frame critical illness protection? Are we framing it in a particular way? And is actually the way that we've been framing it part of the problem that we're seeing as an industry where there maybe isn't the thorough critical illness conversations or products actually being issued out there?

Because I think critical illness cover has been traditionally looked at as something that will often sit alongside maybe a life cover, maybe it sits alongside a mortgage conversation, and it makes complete sense. Buying a home is a major financial commitment and an obvious point at which would you discuss protection.

The issue isn't that we talk about critical illness cover alongside a mortgage. I think the issue that we're seeing is that we can allow the mortgage to become the entire explanation for the product. Because if critical illness cover is presented as something that pays off the mortgage, clients might reasonably assume it's only relevant if they have one.

It might also lead to the use of a mortgage balance as the instant, the automatic sum assured, and the mortgage term as the automatic policy term without fully considering what the client actually needs if they were diagnosed with a serious illness. Yet the costs we've just looked at aren't just driven by an outstanding mortgage balance.

Travel costs don't reduce because the mortgage is reducing. The cost of treatment, childcare, adapting the property, they don't follow the mortgage repayment schedule, do they? And the need for a partner to take time away from work might actually become more significant later in the term rather than less important.

So maybe the question is actually not so much would you like critical illness cover to pay off the mortgage? It's if either of you were diagnosed with a serious illness, what would you want the money to allow you to do? And again, that answer could be very varied. It might include we want to pay off all or part of the mortgage, but it might also be including, we just want to retain some access to a cash reserve.

We maybe we want to pay for some support. Maybe just protecting our savings, giving the family some time to digest. I think when we frame it a bit more broadly like that, we're not weakening the mortgage conversation. We are making it really sit much more firmly with what the client's current lifestyle looks like.

I want to share with you some, some research that's been done by CI Expert within their Critical Thinking Report that came out earlier this year. There's some really important insight and useful insight in there that actually sits nicely with the idea of are we framing critical illness cover in the right way?

One of the questions that was asked in the report of consumers was why don't you have cover? So, we know that it's an important product, and we know that from looking at some of those figures earlier that it can create a lot of additional costs. So why don't so many people still have the cover?

Again, the research that the CI Expert found gave a few reasons. Now, a very broad range of reasons actually. Cost being the largest. 34% of consumers say that critical illness cover is too expensive. 26% say that they don't have a mortgage. I think that immediately takes us back to that framing problem.

If people have only ever heard of critical illness cover discussed alongside a mortgage, it is understandable that they conclude that it's probably going to stop being relevant if they don't have a mortgage. 17% say that they're too old, while others say that they're too young. Some say that they don't have children, they don't have a partner.

So, in other words, people are often deciding that critical illness cover doesn't apply to them because they don't fit in a particular life stage that they associate with the product. There's also some fairly fundamental misunderstandings within the research from consumers. 15% say that they don't trust that the policy will pay.

13% say that they don't understand what it is or actually what the benefit would do. Others believe that their medical history is going to prevent them from obtaining the cover in the first place. And I don't think we should read the chart here as evidence that consumers have looked carefully at critical illness cover and rejected it.

In a lot of cases, they appear to be rejecting an assumption about the product. And actually, what that does do is that actually creates an opportunity for you to go in with a better explanation. Even thinking, look at that cost objection that it's too expensive. If we even just explore that a little bit further.

So expensive compared to what? Expensive for how much cover? Expensive for what outcome? And has the client seen your recommendation with different amounts and structures, or have they just assumed that a comprehensive critical illness cover is going to be unaffordable? Of course, greater understanding doesn't automatically lead to an action, does it?

And even when people recognise that a need exists, there are still some very human reasons why they still put off that decision, and it's not just tied into critical illness cover. I think when we look at some of the behavioural insights of people, particularly when they come to protection and why they often maybe stick their head in the sand, I think framing why those behaviours happen is, can be quite useful just to look at how do we position it, that, that conversation maybe slightly differently.

I've used this model in a few different sessions because I think it helps explain something that we do see quite regularly. So, clients may well understand that protection is sensible. They might agree that there is a financial risk, but they still might leave without putting anything in place.

I think one of the first reasons that we can see that happen is avoidance. We put our head in the sand. A critical illness conversation is asking somebody to imagine being diagnosed with cancer. Imagine being diagnosed with a serious illness that is actually going to maybe stop you working. Maybe imagine you suffering a heart attack. Maybe imagine a partner or a child becoming seriously ill.

It is very uncomfortable, and I think the natural response is often just to move away from the subject rather than engaging with it. That doesn't necessarily mean that clients think critical illness is unimportant. They might just simply not want to be part of that conversation for long enough to make a decision.

We've got overwhelm. So critical illness cover can become technical very quickly. We talk about main conditions. We talk about additional conditions, partial payments, children's cover, enhanced cover, survival periods, single life, joint life, dual life, accelerated benefits, standalone benefits, and all of that is relevant.

But when we present it all at once, it can leave the client feeling like there's a great deal of things that they don't understand. And when people are worried about making the wrong decision, naturally we lead into the point let's just do nothing because it can maybe feel a bit safer.

Present bias. So, I think this is particularly relevant to protection because that premium that leaves the client's bank account every month is real. They see that. But the benefit might not be needed for many years. It might not be seen for many years. It might never be seen. They might never make a claim. So, the cost is immediate, and it's quite real, but the value might feel distant, it might feel uncertain, it might feel way down the line.

And this is where leaning on the various different support services, value-added benefits that insurers offer these days can hopefully help just to bring it back to the present day, bring it back to what gives the client value here and now.

And lastly, I think decisions are often made more emotively before they become logical. So, for example, people might feel uncomfortable about an illness. They might be anxious about the cost. They might be sceptical about insurers. They then might find a logical reason to support that feeling. “Well, I've got savings. My employer's going to look after me. Maybe I'll come back to it later.”

So, we need to be making it comfortable enough for the client to stay in the conversation. We need to make it simple enough that they can follow it, but also relevant enough that they see the future benefit, they see it feeling real, and we want to make it structured enough that they can actually make the decision as well. I'm going to show you a little model shortly that I've used for a number of years now that, that can hopefully help you do that.

But I think just before we do that, just going back to that understanding of the product and familiarising yourself, what actually is critical illness cover? Just so we're all again, familiar with it. Simple definition. So critical illness cover pays out an agreed lump sum if the insured person meets one of the insurer's definitions.

There is often going to be several other decisions underneath that very high-level description that can affect how the policy could be performing. Generally, we're going to be looking at underwriting first. So, the insurer is going to be assessing the likelihood of a client suffering a covered condition, taking into account things like their medical history, their current health, family history, occupation, lifestyle. And of course, depending on that assessment, the client will get standard terms, maybe increased term premiums, maybe exclusions, and in some cases, they might not be able to get cover at all.

The next consideration is the policy definitions, because critical illness cover doesn't just pay because a client's received diagnosis of a familiar carrying name illness. The diagnosis or procedure does need to meet the wording within the contract. There might also be additional payments, partial payments for conditions which are early stage, maybe less severe and these can still be very financially disruptive, even where the condition doesn't meet the policy's main definition.

So, what happens in this instance is that depending on the plan and the person that's covered could receive a payment that might still leave their main sum assured available for a later claim. So, it might still keep the main claim intact while they're receiving a partial payment, a smaller payment.

Children's cover as well, so this introduces another set of choices. Is it included? Is it optional? What's payable? How much? What conditions are covered? Is there a standard or is there an enhanced option? Can a benefit be claimed under one or more parental policy? So, some of those questions obviously are very useful to think about when you're dealing with clients that do have children or looking at multiple policies, rather than just saying, "Oh, okay, the policy includes children's cover."

Does it include pregnancy complications as well? Several insurers, including us, also offer cover for while the policyholders are going through a pregnancy.

Ownership as well, that can change the outcome. Joint life first event cover is normally going to end after the first full claim. Two single policies or dual life structure if it's available, that can leave the other person's cover intact and going back to CI Expert’s research, something that they found that I thought was quite revealing was that joint cover was initially the instinctive choice amongst consumers that did express a view protection, despite only a small proportion saying they really understood the difference.

And actually, once some of the practical differences were explained to those individuals about 51% believed that two single policies offered better overall protection and value. Then we've also got the distinction between standalone and accelerated cover. So, with accelerated life or earlier critical illness cover, a full critical illness claim normally uses the life benefit attached to that cover.

So, the life cover element wouldn't be available if a critical illness claim happens, and then same the other way around, the critical illness claim wouldn't be available if the life cover element happened. The client's not buying two separate full periods from the same plan. So again, that needs to be clear when the cover is recommended and when the client's remaining protection is reviewed after that claim as well.

And something for certainly another day, there could be questions around is there a survival period and trust considerations as well, because depending on the policy design and who's intended to receive the money, we do need to also think about how do we put those policies in the trust and the type of trust that we're using with them as well.

So going back to those behavioural insights piece for a moment, and again, a model I've used for some time now to help position protection is this EAST model, and it's a really simple way just to think about how are we positioning protection conversations. And if, again, we're trying to apply it to the critical illness conversation, if we take easy, so the first part of this EAST model.

So easy isn't about removing important information. It's not about reducing the advice to a slogan. It's about making the route through that conversation easy to follow. So rather than opening with every available policy option, we can begin with the financial problem to begin with. We recommend the appropriate structure and then explain the choices that genuinely affect the client.

For example, with say if either of you suffered a serious illness, we've identified that you would want to have enough money to reduce the mortgage, cover additional costs, and give the other person the option to take time away from work, and that hopefully gives the recommendation a bit of a clear purpose before we start looking at some of the technicalities of it.

Attractive, so we're obviously not trying to make a serious illness attractive, but what we're trying to do is make the outcome meaningful because clients are probably going to be not feel overly emotionally connected to this policy covers 46 main conditions and 32 additional conditions.

They might connect with being able to take six months away from work, protect their savings maybe pay for help at home, avoid making immediate decisions without having to think about selling the property.

Social, so this is more about making the conversation and protection feel normal and relevant. The CI Expert research showed that real-life examples of successful claims were one of the most motivating forms of content tested for critical illness cover from consumers. And hearing from somebody at a similar age or life stage also resonated as well. Now look, that, that doesn't mean telling the client that everybody's buying critical illness cover.

But what it does mean is it means we should be looking at using real and of course, compliant examples to show that claims involve people who are once sitting maybe in front of yourselves and again, making the exact same decision that they're making.

And finally, we've got timely. So, protection always feels like something that could be revisited later. And thinking back to that present bias, probably thinking about it later on makes it quite appealing. We're going to put our head in the sand at the moment, and then we'll think about it in the future. But actually; a mortgage, a remortgage, a new child, change of estate planning needs, launching a business, salary increases, relationship changes, it does give us a genuine reason to have that conversation now. And again, as advisers, you can help just with that client, explain how health, maybe insurability could change, and actually postponing that decision, might not be the long-term more suitable option from again, a health and insurability perspective.

So, if we move on to the claims, because obviously this is where protection becomes real, isn't it? This is the point where the policies become real to clients. I want to show you shortly are some of our own claims statistic because I think it's quite useful to see how we've been seeing various trends occur within claims.

But also, before we do that, I wanted to look at what exactly do consumers themselves believe they would do with the claim from a critical illness policy. So going back to the Critical Thinking Report in that report, consumers were asked the question, "If you had a critical illness policy and you needed to make a claim in the future, what would you expect to use the payout for, or what would you spend the money on?"

And again, pretty broad range of answers but some interesting answers, nonetheless. 8% of consumers said that they would use a critical illness payment to repay their mortgage in full. More people expected to use it to replace a lost income or cover everyday expenses. Others referred to paying for things that would help their health, maybe funding private treatment saving for some for the future and even taking away time from work to help care for a partner or a child.

And that doesn't mean that paying off a mortgage is the wrong use of a, a critical illness benefit, but reducing or clearing the debt can remove a major monthly commitment, and it can give the family a whole significant amount of more confidence from their finances. But I think it does tell us that consumers expect the payment to perform much more widely than, than we might initially assume.

But it does also raise a point around how do we calculate the sum assured? Because if we automatically match a critical illness payment to the sum assured to the mortgage balance, are we running the risk of providing too much for one purpose but too little for the others? If we automatically think about, assuming that the client's need for recovery capital reduces at exactly the same speed as their repayment mortgage, then, how are we factoring that into the type of cover that they might need? Of course, the certain insurers do offer the likes of a family income benefit policy to pay on critical illness cover.

So, there is also an element of is there some form of income replacement options out there for where there is that need to protect against a serious illness. But for a lot of clients, that full mortgage repayment will still be a priority. For others, it might be more appropriate to repay part of the debt, retain access to some capital, as I say, that extra rainy-day fund.

And if a client's got maybe some good income protection coverage as well, maybe the use for a critical illness benefit is slightly different from a client that has no continuing income protection.

Now, as I said, I wanted to show some of the, the findings from our most recent claims report. And in the latest claims report, probably no surprise to see that cancer, heart attack, stroke and multiple sclerosis accounted for the top claims on a critical illness policy. And I think from our perspective, it accounted for about 84% of all critical illness claims paid. Actually, cancer alone represented about 64.3% of claims, with more than a hundred and £125 million paid to customers diagnosed with cancer. Now, the youngest critical illness claimant at Royal London last year was 21, the oldest was 81.

I think those ages are quite useful. I wanted to show them for a particular reason because I think we often think illness, serious illness, that's something that happens either at the end of somebody's working life or towards the end of somebody's working life. But actually, the claims experience is much wider than that.

And we've of course got on screen here on that little table the average age of claimants. Those are young individuals that are on average making claims on critical illness cover. I think also the concentration of claims around a small number of conditions can also help you as advisers to keep that conversation a bit more grounded.

We don't always need to begin by discussing the total number of definitions. Yep, cancer, heart attack, stroke, and MS are conditions that clients recognise, and they can readily understand the potential impact that could have on their work, their family life, their outgoings. They may well have experienced it through to close family members, loved ones going through this themselves.

But of course, conditions and the number of conditions covered doesn't always tell us everything about the quality of the cover. We need to look further than that as well. Additional conditions, access to other support options. Are early-stage cancers treated in a particular way? An early-stage cancer diagnosis might not meet the main cancer definition but can still involve investigations, treatment, time away from work, and of course, a considerable amount of anxiety.

So, an additional payment, if it's offered, can give that support at that earlier point while leaving clients still accessible to that main benefit later down the line if the condition becomes more serious and meets the full definition. I suppose the other point I'd probably emphasise here is that a diagnosis rarely creates just one financial problem.

It might affect the income, might affect normal expenditure treatment costs and the role of other people in the household. It often affects much more than just the individual. And when it's a child who becomes seriously ill, then those effects can actually extend well beyond the person that's named on the adult policy. Now, look, no parent, as a parent myself, wants to arrange children's critical illness cover and expect to use it.

But actually, in 2025 last year, we paid a 177 children's critical illness claims. One in three related to cancer, while the remaining claim involved a range of other conditions that, let's be honest, many parents might not even ever associate with critical illness cover.

And of course, within there, if the insurer offers it like it does at Royal London, there is also the opportunity for clients to be able to make claims before a child is even born through pregnancy complications. And I think here the financial need is much more different from an adult because a young child doesn't have an income to replace, they don't have a debt attached to them.

The financial impact still does, though, fall on the parent. One parent might have to reduce the hours that they're working. They might have to stop working completely altogether. It might be for a temporary amount of time. There might be travel costs maybe travel to specialist treatments.

They might have to look at different accommodation costs to the hospital. There might just be additional childcare needed for siblings or changes needed within the home to help adapt to this new way of life. So, the family may simply need money available so that their employment doesn't dictate how much time that they can spend with the child.

So, there's, again, a lot of other implications when we're thinking about children being seriously ill. And, the fact that 177 families needed that support, it really is a very emotive but very powerful story to tell.

And I thought I'd share with you a couple of real-life case studies. These are real-life client stories from when a critical illness claim has offered value, that has been there. So, the first customer took out a critical illness cover policy in their early twenties. So, what they found was that nearly 10 years later, they did start to feel a bit unwell. They were referred to further neurological investigations.

They were later diagnosed with multiple sclerosis. The claim was submitted; a lump sum was paid in the same month. Some things that I thought I'd highlight with that particular story. So, the customer didn't wait until they felt at risk or until they were ill, before they started to think about critical illness cover, they actually arranged it early in their working life at a point where, again, they secured it.

Of course, we can't assume that a client who declines cover today is going to get that, in five, 10, 15, 20 years obtain that same amount of cover on the same terms. Health changes, investigations begin, medical history develops. So again, that's why we said earlier, postponing that conversation later on, deferring it, sticking our head in the sand, it doesn't always offer the same or the best outcomes.

The second case study here involves a young couple. They arranged cover while they were looking at growing their family. They, during the pregnancy, which was progressing as normal, end up having complications during the birth, and the baby actually had a stroke during the birth, and it required intensive care.

They did have a critical illness policy and with the childhood element attached to it, the payment helped them alleviate some of the financial pressures that they were facing at that point in time. It allowed them to care for their child. And again, the value of the benefit was not about paying a debt attached to the child, it was about giving the parents options when their life changed. And I think options are one of the best things that protection gives clients, it is options.

So, we've looked a lot so far at what is the need for critical illness cover, why it's important, but what about the opportunities to talk about it? And there are going to be loads of opportunities. You're probably having loads of conversations at the moment where there's an open door really for critical illness cover.

The obvious answer is during a mortgage, but it's far from the only one. So, I wanted to share with you a few maybe targeted opportunities, maybe core opportunities that, that I've seen other advisers pull out when they're focusing on critical illness cover. Now, firstly, first-time buyers, another obvious starting point.

For these individuals, their mortgage might be their first major financial commitment, might be the first time that they're becoming dependent on their income, maybe heavily dependent on their income. So, the opportunity is quite apparent there. We're using that as the trigger without allowing the mortgage balance to become the entire critical illness conversation.

We're thinking about individuals, what we're looking at here more about the ability for them to repel it, protect that income of theirs. A remortgage as well gives us another really good opportunity to review that conversation. The client might already have protection, but their circumstances might have changed. They might have changed considerably since it was arranged, their mortgage, their income, family setup, their occupation, their savings might be different.

And it should be a review rather than an automatic replacement exercise because before we actually can consider the likes of changing an existing plan, again, it's important to make sure that the current health, that the underwriting process, the exclusions, definitions, premiums that the clients are paying and potential benefits that could be lost are considered rather than just going straight in and looking at changing the plan exercise. It's a really important thing here to be reviewing what the situation is first.

Of course, business owners, another opportunity for critical illness cover because a serious illness can affect the business' ability to continue without them if they have to take a period of time away from work, might even affect the viability of that business long term. Again, separating the personal need from the business need. Personal critical illness cover can help protect the owner's household. Key person, shareholder, business loan cover, again, is about protecting the business, protecting the company. Of course, one of the benefits, you shouldn't just casually be expected to solve both of the problems. So, we need to be thinking both personal and business protection from a critical illness space.

Young families, they will most likely have additional income, care dependencies. The conversation can include adult children's critical illness cover to sit alongside the adult policy, kind of appropriate children's options, whether each parent should have independent cover with child cover attached onto it, so giving them multiple claim opportunities.

Renters as well often overlooked because, I think a lot of the way we frame protection can sit nicely within the mortgage space. But again, renters, they are still there. They still have large outgoings. And CI Expert actually found that around one in five renters believed that critical illness cover felt less relevant because they didn't own a property. But they do still have substantial monthly household costs, limited savings, and an income that's probably going to be supporting themselves and maybe somebody else as well.

And of course, there is huge opportunities in the wealth and estate planning space too. A client could have valuable assets but limited access to cash. Maybe a serious illness is going to put them into a position where they might have to stop pension contributions, or maybe reduce contributions, start to draw investments at what could be a very unattractive time or maybe just use assets for another intended purpose. So, there are a real broad range of even just initial opportunities to bring in things like critical illness cover, of course income protection, and of course life cover into this space with your clients.

Okay, so, we did start today by positioning that fairly uncomfortable topic, ‘better off dead’. And what we I did ask the question as to whether Kieran and his family might have been better, financially speaking, if he'd died rather than if he'd survived that heart attack. So, I want us to return back to that question and hopefully now with a slightly more clearer view of the role that critical illness cover can play within there.

So, this little phrase I heard from a colleague a few months ago, and it really stuck with me, which is “Life cover protects against the financial consequences of dying, but critical illness cover protects against the financial consequences of surviving.” Now, it doesn't mean that one is more important than the other.

It means that they're designed for different outcomes. If Kieran died, his contribution to the household ends permanently. But life cover can provide some capital to help repay the liabilities, replace the income, support the family. If he survives a serious heart attack, for example, he remains part of the household, thankfully, but the family's financial position could have changed quite significantly.

The incomes maybe now reduced. His own business is maybe now impacted, and Joy might herself now be thinking ‘do I need to reduce my working hours or change my working pattern?’. And of course, there could be new outgoings and expenditures come out. So critical illness cover is giving the family that capital that can respond to that disruption.

Income protection can also then sit alongside it, and it can provide that regular benefit if Kieran can't work and meets the terms of the policy. And again, we've got the life cover there that can protect on his death, the financial viability of that family. So, the answer to the title that we looked at earlier certainly isn't that Kieran would be genuinely better off dead because, of course, we know that he wouldn't.

It's that a death-only protection plan might leave his family insured better for his death than for his survival, and really do families want that? I suspect most, if not all, would say no. And when we're looking at a properly built protection portfolio, that is intended to try and remove that that, that disjointedness.

It recognises that there is a surviving consequence, and that's probably the better consequence, isn't it? Rather than not surviving, and there's certainly a much more damaging consequence on the back of that.

So, we have covered a lot today and thank you to everyone that's sent across some questions. We'll follow up with your questions after the session today. We've got our learning outcomes back on screen. So hopefully we've covered all of them over the last 45 minutes.

Before we do close, just a very quick reminder about your CPD certificate. So, it will be emailed to you right after the webinar today. It can take up to 24 hours to arrive. Over that time, there isn't any need to contact us if it hasn't arrived. Give it that 24-hour window and again, be able to track that once you have received it with your CPD record.

Last but and certainly not least from myself is a, a huge thank you for your time today. Thank you for joining. Thank you for asking the questions and thank you for being part of this totally change in attitude towards critical illness cover.

But if you do want to find out more about Royal London's protection proposition, if you want to find out more about our literature, our tools, claims information, and even most importantly, what support is available to you from Royal London, have a look on our adviser website, www.royallondon.com/protection and you'll be able to get access to a wide range of information on there.

But finally, once again, a huge thank you for joining me today, and have a fantastic rest of the day.