Added-value benefits have become a common feature on many protection policies over the past 15 years, offering everything from shopping discounts to bereavement counselling. But many believe these extras are set to become the core part of the protection proposition, with the insurance becoming an add-on.
A recent poll by Protection Review illustrates the support for this switch. It found that 60 per cent of respondents could see a time when today’s added-value benefits became the core product. A quarter of respondents did not believe this would happen, with 15 per cent undecided.
Roger Edwards, managing director of Roger Edwards Marketing and marketing director of Protection Review, is not surprised by this finding. He was at Bright Grey, now part of Royal London, when it launched its added-value benefit, Helping Hand, in 2003.
He says: “I can remember talking about the possibility that one day people would buy Helping Hand as that was what they wanted, with the insurance element as the bonus. It has not happened yet, but we are on the trajectory.”
Adding interest
Certainly, the race to offer the most comprehensive range of added-value benefits is well under way, with insurers including a variety of services on their plans.
Health-related benefits are the most commonplace. These include medical information and advice services, second medical opinions, health and wellbeing support, GP helplines, and counselling services. Other common adds-ons include legal and debt management helplines, and support to find child and elderly care.
Some providers also offer rewards. Discounts on shopping and gym membership are relatively common, but Vitality takes it a step further by offering members rewards, such as free coffees, cinema tickets and discounted Apple watches if they engage with its health and fitness programme. This sees it handing out around 4m Starbucks coffees, more than 1m cinema tickets and 100,000 Apple watches a year.
Most add-ons are included free, but a few insurers also have paid-for extras. For example, Legal & General’s GP24 Service is available for an additional £3.25 a month on its critical illness insurance. This gives policyholders access to a GP anytime and anywhere in the world.
Aviva also offers a couple of optional extras. Its global treatment option provides up to £1m of cover a year for treatment of serious conditions such as cancer, bypass surgery and bone marrow transplants, while its fracture cover gives up to £6,000 plus physiotherapy support for any of 18 different breaks. Each of these is available for an extra £4 a month on its protection plans.
Becoming core
Turning these from added extras into a core proposition may require a complete product rethink, but there are plenty of reasons in its favour.
Mr Edwards notes: “People do not want to think about the possibility of serious illness or death; the added-value benefits are much more appealing. Consumers would much rather know they have someone they can contact for support, rather than that one in three of us will get cancer.”
The other key benefit of many of these added-value benefits is that the policyholder can use them without experiencing a medical issue. Although some services are linked to claims – for example the rehabilitation support included on income protection – others, such as the second medical opinion, can deliver real benefit to policyholders and their families at any point in their lives.
