Norwich Union is launching a reviewable premium critical illness product with guaranteed policy definitions on Monday 18 August 2003.
Norwich Union is launching a reviewable premium critical illness product with guaranteed policy definitions on Monday 18 August 2003. Premiums on the new critical illness product will be reviewed every five years on the policy’s anniversary.
In addition, premiums for term assurance with the option of guaranteed critical illness and mortgage life insurance (MLI) with the option of guaranteed critical illness will be increased with effect from 18 August.
Summary of changes
- Standalone critical illness policies will be available on reviewable rates only from 18 August.
- Norwich Union continues to offer guaranteed rates when critical illness is chosen as an option with term assurance or mortgage life insurance.
- Premiums will increase on mortgage life insurance with a guaranteed critical illness option by an average of 12%.
- Premiums will increase on term assurance with a guaranteed critical illness option by an average of 1%.
- Products sold without a critical illness option are not affected and no price increases apply.
The critical illness offering from Norwich Union will be enhanced by the addition of free childrens critical illness cover. All natural, step or legally adopted children up to age 18 will be covered on an adult’s policy. The childrens critical illness cover is free and provides a sum assured of Ł10,000 or 50% of the critical illness sum assured, whichever is lower, for each child on the adult’s policy.
Lawrence Jackson, head of protection product development at Norwich Union said, “The protection market is constantly changing and we have seen the cost of guaranteed critical illness cover rise in line with greater life expectancy and medical advances. It is therefore
important that we are able to offer an alternative and affordable premium choice to the customer. The Norwich Union premiums for term assurance with reviewable premium critical illness are on average 18% cheaper than our guaranteed critical illness rates.
“An important point to note is that at review, premiums may increase or decrease depending on a number of factors, in particular expectation of future claims, industry experience and impact of medical advances. However, one thing that won’t change is the policy definitions, these will be guaranteed. This will give our customers affordable cover with the peace of mind that the policy definitions will not change in the future.”
Example premiums
Male, smoker, age 40 next birthday, 10 year term, sum assured Ł175,000:
| Term assurance with guaranteed critical Illness | Pre 18 Aug Ł130.62 | Post 18 Aug Ł132.02 |
| Term assurance with reviewable critical Illness | N/A | Ł115.57 |
Joint Life, non-smokers, both aged 35 next birthday, 25 year term, sum assured Ł100,000:
| Mortgage life insurance with guaranteed critical illness | Pre 18 Aug Ł45.09 | Post 18 Aug Ł50.52 |
| Mortgage life insurance with reviewable critical illness | N/A | Ł43.92 |
Applications on current terms for standalone critical illness at guaranteed rates, mortgage life insurance with critical illness and term assurance with critical illness will be honoured subject to normal underwriting, provided the proposal and a valid quote* are received by Norwich Union by the 16 September 2003.
Ends
| Press office contacts: | Out of hours | |
| James Evans | 08703 66 68 78 | 07790 487105 |
| Ian Beggs | 08703 66 68 71 | 07790 487533 |
| Lorna Wiltshire | 08703 66 68 78 | 07788 471849 |
| Louise Goffee | 08703 66 68 70 | 07810 057362 |
Notes to Editors
Norwich Union is the UK’s largest insurer. It is a leading provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 70% of the company’s long-term savings business.
Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group.
Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media
- The cost of cover and the average increases quoted depend on the age, sum assured and other relevant underwriting criteria.
- Term assurance with critical illness premium rates were last increased on 9 June 2003. Mortgage life insurance with critical illness premiums were last increased on 9 December 2002.
- The Norwich Union premiums for term assurance with reviewable critical illness are on average 18% cheaper than our guaranteed critical illness rates and on average premiums are 15% cheaper for mortgage life insurance with reviewable critical illness.
- Proposals submitted to Norwich Union before the 17 August will not be affected.
Guaranteed critical illness: Guaranteed rates for critical illness are premiums that do not change for the term of the critical illness contract. This is different to reviewable rates that can be reviewed after the critical illness policy has been taken out (every 5 years).
* Valid quote: We will honour applications on current rates received by 16 September provided the application is accompanied by a valid quote. This is a quote dated from 18 July 2003 until 17 August 2003 which must be submitted to, and received by, Norwich Union with the application form by the 16 September 2003 to obtain the current rates for Term plus CI/MLI plus CI and guaranteed rates for standalone CI.