Update your policy for better protection

MOST protection insurance policies sold today will make payments to those who are diagnosed with early stage cancer of the bladder. If the HSBC policies bought by Andy and Alistair Macpherson had included this, they would have received payouts straightaway, albeit limited ones.

Such ‘early stage’ payments are typically capped at £25,000 although if the cancer becomes more aggressive and invasive, the insurer will pay the full sum assured under the policy.

Insurers which provide £25,000 of cover against early-stage bladder cancer include Aegon, AIG, Aviva, Canada Life, Old Mutual Wealth and Royal London. Other insurers such as LV= and Zurich are less generous while (surprise, surprise) HSBC does not include it. Alan Lakey, of Highclere Financial Services in Hemel Hempstead, Hertfordshire, is one of the country’s leading protection insurance advisers. He says many insurance protection policies sold in the 1990s and 2000s are inferior to those now available.

For example, he says an HSBC critical illness plan bought in 2009 is inferior in 88 ways to an Aviva plan purchased today. He adds: ‘Not only does the Aviva plan offer a wide range of less advanced cancer cover but also pays out on loss of one limb or paralysis of one limb.’

Lakey says switching to a superior protection plan makes great sense although it may result in higher premiums.

Such a switch should only be done through an adviser specialising in such cover.