Newsletter SCOR Global Life
Juvenile Critical Illness
Another specialized aspect of Critical Illness products are children’s covers. There are many variants of children’s cover around the world starting from the children’s rider in the UK to the orphan protection in China. Our focus is on Canada, where a wide spectrum of products can be found.
The children’s market generally has more emotional appeal than the adult one. In addition to the traditional needs covered by critical illness, the juvenile benefit is intended to support family members in a period of emotional stress brought on by a child’s critical illness. Two types of protection are offered in the market.
1. Family rider
The family rider covers present and future children in the same contract. This rider is added to the parent’s CI contract and cost of the protection varies between $10 and $15 per $1,000 of insurance amount regardless of the number and ages of the children. This differs from the UK approach where many companies include children’s cover as a standard condition in their coverage without an option to opt out. This may explain the lower cost of children’s coverage in UK, representing only around 1.5% of total CI claims.
If a child is born to the policy owner while this benefit is in force, such child will automatically become insured under this protection. Some restrictions apply to a child born in the first ten months of the policy in order to remove anti-selection. Underwriting
is done for all existing children at the inception of coverage.
The children’s CI benefit normally terminates at the insured’s 21st
birthday or even at
the 25th birthday if the insured is still a full-time student. Some companies offer a conversion privilege to an adult product.
2. Standalone product – a success story in Canada
This second type of protection is offered on a standalone basis. Most of the success surrounding children’s CI insurance comes from this version. It offers the same wide variety of premium options and is a duplicate of the “adult” version but with specific additional illnesses like congenital heart disease, cerebral palsy, cystic fibrosis, muscular dystrophy, Type 1 diabetes, autism and Rett syndrome.
Premiums are dependent on the age and gender of the child. Full underwriting is done on each child covered with suitable scrutiny given to the amounts of CI insurance on the parents and other siblings. All juvenile conditions generally cease at age 18 or 25. Past that age the insured remains covered by the adult conditions.