The rates on Norwich Union guaranteed rate critical illness policies are to be increased with effect from 9 December 2002. This is the first increase in Norwich Union guaranteed rates in the past 18 months and puts them back to around the same level they were two years ago. Rates for existing policies are unaffected.
The rates on Norwich Union guaranteed rate critical illness policies are to be increased with effect from 9 December 2002. This is the first increase in Norwich Union guaranteed rates in the past 18 months and puts them back to around the same level they were two years ago. Rates for existing policies are unaffected.
The uncertainty in the future cost of critical illness claims resulting from advances in medical science, has led to reinsurers increasing guaranteed terms for critical illness business or withdrawing from the market. These medical advances lead to the earlier detection of illnesses and therefore earlier claims. These factors have in turn led to the increase in cost of critical illness cover.
As a result of the increase in reinsurance rates, new policy premiums will rise by an average of around 40 % for stand alone critical illness policies, Mortgage Life Insurance* with critical illness, and term assurance policies with critical illness.
Keith Simm, Protection Manager for Norwich Union, said: “ There have been some major advances in medical science which will lead to the earlier detection and, in many cases, successful treatment of critical illness diseases.
“As a result, there will be a rise in the number of claims on critical illness policies. Guaranteed rates for critical illness need to fully take account of the rise in claims and therefore need to be increased.
“We believe this is a move which will be followed by other providers of guaranteed rate critical illness policies as the issue of rising claims affects the market as a whole. “
Ends
Press office contacts:
| James Evans | 08703 66 68 78 | 07790 487105 | ||
| Ian Beggs | 08703 66 68 71 | 07790 487533 | ||
| Louise Goffeee | 08703 66 68 70 | 07810 057362 |
Notes to Editors
Norwich Union is the UK’s largest insurer. It is the UK’s largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% 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 are available on the Aviva plc website at www.aviva.com
- A selection of images are available from the Norwich Union Newscast site at www.Newscast.co.uk
*Mortgage Life Insurance:
Mortgage Life Insurance is a Norwich Union menu based product which is a decreasing life insurance plan designed for use with a repayment (capital and interest) mortgage.
Guaranteed critical illness rates:
Guaranteed rates for critical illness are premiums which are guaranteed for the length of the critical illness contract. This is different to renewable rates which can be reviewed once the critical illness policy has been taken out.
Reinsurer:
A reinsurer is a third party to whom an insurance company sub-contracts
part of an insurance risk, or an entire book of business.
Example premiums* :
Male, non smoker, age 40 next birthday, 25 year term, sum assured Ł100,000.
| New premium | Pre 9 Dec premium | |||
| Stand alone critical illness | Ł64.10 | Ł46.20 | ||
| Term assurance with critical illness | Ł66.20 | Ł48.50 | ||
| Mortgage Life with critical illness | Ł41.96 | Ł28.76 |
* The cost of cover will depend on the period and level of term selected, in addition to an individuals personal circumstances.