Cigna joins redundancy cover freeze

Cigna is joining Fidelity Life and Partners Life in putting a hold on new sales of redundancy cover.

Tuesday, March 24th 2020, 10:06AM

Gail Costa

Chief executive Gail Costa said it would defer new applications for a period of three months.

The measure was designed to be temporary. Costa said it was common to get surges of inquiry in situation such as these. Cigna had been considering how Covid-19 could affect it since the outbreak first started to take hold in other countries around the world.

Customers who already had redundancy cover would be able to claim, provided it was after the 180-day stand-down and all terms and conditions were met.

The insurer is also developing a hardship policy for people who are unable to pay their premiums due to the effects of the coronavirus.

Costa said more details on that would be available soon.

She said advisers would need to gear up to work over the phone and online instead of face-to-face with clients.

“If they are using paper-based apps it's time to move to electronic versions. A lot are but equally a lot prefer the paper.”

She said, if the outbreak was not brought under control, it would put pressure on claims. But she said the move to lockdown was the right one, even though it was disruptive. “We need to act. We have information in advance of the rest of the world. Acting along those lines gives us a good chance.”

All Cigna Assurance Extra policies also have a built-in benefit that provides premium relief. Costa said customers facing financial hardship could suspend their cover for up to three months.

“Customers don’t need to make any premium payments for these three months, however there is no cover during the suspension period. Cover will recommence after the three months suspension without the need for underwriting.”

People with Premium Cover could claim and have their premiums paid for up to six months if they were made redundant or declared bankrupt.

“We do not cancel policies until at least two months of premiums have been missed, meaning coverage extends for a number of months even when premiums have been missed.”

Existing clients with Assurance Extra and business products would be covered for Covid-19 provided they met the required conditions and had fully disclosed pre-existing conditions.

“We don't have a pandemic exclusion and we will not exclude Covid-19 as a cause of claim,” Costa said.

But it was stepping up underwriting with more scrutiny on people who could have a predisposition to complications of Covid-19. Applications were being looked at case-by-case and managed appropriately, she said.

“Since Covid-19 was declared a pandemic on March 11 we've been taking additional steps to ensure new applicants – those not yet insured with us – with heightened risk factors are managed and assessed appropriately.”

She said advisers should use Cigna's e-app as a way of limiting face-to-face contact with customers.

Tags: Cigna Income Protection insurance redundancy cover