Article date: 9 December 2002
The rates on Norwich Union guaranteed rate critical illnesspolicies are to be increased with effect from 9 December 2002. Thisis the first increase in Norwich Union guaranteed rates in the past18 months and puts them back to around the same level they were twoyears ago. Rates for existing policies are unaffected.
The uncertainty in the future cost of critical illness claimsresulting from advances in medical science, has led to reinsurersincreasing guaranteed terms for critical illness business orwithdrawing from the market. These medical advances lead to theearlier detection of illnesses and therefore earlier claims. Thesefactors have in turn led to the increase in cost of criticalillness cover.
As a result of the increase in reinsurance rates, new policypremiums will rise by an average of around 40 % for stand alonecritical illness policies, Mortgage Life Insurance* with criticalillness, 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 willlead to the earlier detection and, in many cases, successfultreatment of critical illness diseases.
“As a result, there will be a rise in the number of claimson critical illness policies. Guaranteed rates for critical illnessneed to fully take account of the rise in claims and therefore needto be increased.
“We believe this is a move which will be followed by otherproviders of guaranteed rate critical illness policies as the issueof rising claims affects the market as a whole. “
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 theUK’s largest provider of life, pensions and investmentproducts and one of the leading IFA providers. IFAs provide around75% of the company’s long-term savings business.
Norwich Union has strategic alliances with building societiesand other leading UK brand names including Tesco Personal Financeand The Royal Bank of Scotland Group.
- Norwich Union’s news releases are available on the Avivaplc website at www.aviva.com
- A selection of images are available from the Norwich UnionNewscast site at www.Newscast.co.uk
*Mortgage Life Insurance:
Mortgage Life Insurance is a Norwich Union menu based product whichis a decreasing life insurance plan designed for use with arepayment (capital and interest) mortgage.
Guaranteed critical illness rates:
Guaranteed rates for critical illness are premiums which areguaranteed for the length of the critical illness contract. This isdifferent to renewable rates which can be reviewed once thecritical illness policy has been taken out.
A reinsurer is a third party to whom an insurance companysub-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£100,000.
|New premium||Pre 9 Dec premium|
|Stand alone critical illness||£64.10||£46.20|
|Term assurance with critical illness||£66.20||£48.50|
|Mortgage Life with critical illness||£41.96||£28.76|
* The cost of cover will depend on the period and level of termselected, in addition to an individuals personalcircumstances.