On Monday, July 28, Assumption Life launched Critical Protection, a simplified issue critical illness product. Critical Protection is Assumption Life’s first foray into critical illness insurance, having previously offered only life insurance. Let’s take a look at Critical Protection and how Assumption Life plans to target this product.
Critical Protection is a term insurance product, giving you a choice between 15, 20 or 25 year terms before renewal or level term to age 75. All policies, no matter the term chosen, expires at age 75. Issue ages are between 18-60. The minimum face amount is $10,000 and the maximum is $100,000, which is enough for the average Canadian. A return of premium on death rider (ROPD) allows premiums to be refunded to a surviving beneficiary if the insured passes away while insured. The flexible return of premium rider allows premiums to be refunded to the insured once coverage expires or the insured attains age 65.
Although the 16 illnesses covered are less than the number found in traditional critical illness insurance policies, the big three – life-threatening cancer, heart attack, and stroke – are all covered under Critical Protection.
Premiums for Critical Protection are fair, falling in between the premiums found in other critical illness products in Canada. Like all of them, premiums for Critical Protection are guaranteed for the life of the contract, and cannot be increased by Assumption Life due to increased claims experience.
Simplified issue policies are intended to speed up the purchasing process and allow for hard-to-qualify individuals to acquire insurance. By answering ‘no’ to all 14 questions on the application, the applicant can be approved immediately without further medical testing. The questions inquires about personal and family medical history, driving record, criminal record, drug use, dangerous avocations, foreign travel, build and recent excessive weight loss or gain.
Unlike other simplified issue products where applicants are rejected if they answer ‘yes’ to any question, a ‘yes’ to a question on the Critical Protection application doesn’t result in an automatic denial. Instead, the application is submitted to the underwriter to determine the risk level associated with the applicant.
By adding critical illness insurance, Assumption Life have diversified their line of products to include more than life insurance. It is targeting young adults who are looking for an inexpensive way to acquire critical illness protection, and older income earners looking to save on the renewal costs of their previous policies. The simplified issue aspect of it should attract many consumers, who are looking for a more streamlined process to purchase insurance. Critical Protection is not their only product to offer simplified issuance; life insurance with face amounts of $250,000 and under can also be issued via this speedy, no medical exam process. It will be interesting to see if other insurance companies follow suit and increase the number of simplified issue products.