A Technical Marketing presentation for advisers highlighting the need and opportunities for Serious Illness Cover

1. Serious Illness Cover
Innovative cover for a changing world
For advisers

2. 2
Agenda
1. Do you need Life Cover and Serious Illness Cover?
2. Serious Illness Cover: Why Serious Illness Cover the future?
3. How does Serious Illness Cover work?
4. How does Serious Illness Cover compare to critical illness cover?
5. Serious Illness Cover Booster
6. Additional covers and options
7. Get more with Vitality Optimiser

3. Do you need Life Cover and Serious Illness Cover?

4. 4
The value of Life Cover and Serious Illness Cover
Likelihood of claim payout before age 65
You could be over 7 times more likely to receive a claim payout if you
add Serious Illness Cover to Life Cover
PruProtect Life PruProtect Life & Comprehensive SIC (Severity A-F)
7.6 times
Non-smoker
Age 30 at entry
6.5 times
Non-Smoker
Age 45 at entry
Likelihood of a payout
Source: Hannover Re UK Life Branch, January 2013
Expected claim likelihood before age 65 are based on best estimates, adjusted to be gender neutral
and allowing for future trends, for lives that have been underwritten and accepted on standard rates.

5. Serious Illness Cover
Why is severity based cover the future?

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The world around us is changing
We need to evolve to stay ahead
LPs
Tapes and
videos
Indicative not actual trends in sales
CDs and
DVDs
Digital

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Causes of death are constantly changing too
So protection against illnesses also needs to evolve
Bubonic
Plague
Indicative not actual trends in medical conditions
Smallpox
Cancer
Year 1300s 1800s 2000s

8. 8
Case study: The changing face of cancer
It’s becoming more common, but it’s becoming less advanced
Rise in incidence rates
1 in 2
of us are expected to be
diagnosed with cancer in
our lifetimes
Fall in death rates
Source: Cancer Research UK, 2011
European Age-Standardised Incidence Rates per 100,000 Population, by Sex, Great Britain
Shows incidence rates for all cancers excluding non-melanoma skin cancers.

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Trend 1: Illnesses are becoming less severe
Earlier diagnosis and better treatment mean fewer illnesses progress to a critical status
Critical
Severe
Chronic
Cover should payout a lower amount earlier, reflecting earlier diagnosis
and the lower impact of illnesses

10. Trend 2: Diseases are becoming more lifestyle related
Lifestyle is key to managing the risk of illness
10
3
4
50
3 controllable behaviours
Poor nutrition, lack of exercise, smoking
We need to help people understand and improve their health to prevent the
onset of lifestyle illnesses
Source: Oxford Health Alliance, 3four50.com, January 2014
4 chronic disease of lifestyle
Cancer, diabetes, lung disease,
Cardiovascular disease
50% of deaths worldwide

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Trend 3: We are living longer, but in ill health
The risk of one or more illness is increasing
The number of people living to 100 will increase from 13% to 60%:
Born in 1951
Life expectency 100 or more
Life expectency less than 100
13%
87%
Born in 2012
Life expectency 100 or more
Life expectency less than 100
40%
60%
Born in 2060
Life expectency 100 or more
Life expectency less than 100
60%
40%
Since 1990:
Life expectancy has increased 4.6%, but “healthy” life expectancy has only risen 3.0%
We need cover that allows customers to claim more than once
Source: Female life expectancy rates, British Medical Journal, January 2013

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Why Serious Illness Cover?
• Severity based payouts
We pay out between 5% and 100% of the Serious Illness Cover depending on the severity
of an illness
• We payout earlier
We recognise illnesses are being diagnosed and treated sooner, so we payout on diagnosis
for things like early stage cancers, heart attack and stroke
• Cover for more conditions
A severity based approach means we can cover more conditions than any other insurer, so
customers are more likely to get a payout
• Vitality
All our plans come with Vitality to help customers improve their health and reduce the risk of
illness. They can also access more benefits with Vitality Plus or Vitality Optimiser.
• Cover for progressive and multiple claims
Our approach means if we pay out for a less severe illness, customers still have cover if
their condition progresses or if they are later diagnosed with a different condition

13. How does Serious Illness Cover work?

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The Plan Account
A mechanism to pay out based on severity
• The cover purchased is put into a notional pot - the Plan Account.
• Any claims get paid from the Plan Account, and when this is empty no further benefits can
be paid.
Plan Account
Claim 2
reduces the
Plan Account
Claim 1
reduces the
Plan Account

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Primary Cover
Choose the level of cover required
A
100%
B
75%
C
50%
D
25%
Primary Cover
Primary cover protects against more severe conditions
• It pays out on severities A-D and covers 102 conditions

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Comprehensive Cover
Choose the level of cover required
A
100%
B
75%
C
50%
D
25%
Primary cover protects against more severe conditions
E
15%
• It pays out on severities A-D and covers 102 conditions
Comprehensive cover protects against both more and less severe conditions
• It pays out on severities A-G and covers 166 conditions
F
10%
G
5%
Primary Cover
Comprehensive Cover

17. How does Serious Illness Cover
compare to Critical Illness?

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Why other providers payouts don't go far enough
The limitations of traditional critical illness policies
• Conditions covered
Traditional critical illness policies cover 40 illnesses. PruProtect cover:
− 102 on our Primary Serious Illness Cover, and
− 166 on our Comprehensive Serious Illness Cover
• Some providers pay a reduced amount for a limited number of conditions
For these conditions they may limit their payout to between £12,500 and £25,000. So they
could pay less than 12.5% or 25% if your client has a larger sum assured.
• Poor link between severity of illness and payout
Many providers do not recognise the difference in treatments and pay the same payout
regardless
− For example, some providers pay the same amount for Mastectomy and Lumpectomy

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Cancer
We cover more cancers than any other UK insurer
• Trends in cancer:
– 1 in 2 of us are expected to get cancer at some point in
our life
– National screening programmes have meant earlier
diagnosis and either less invasive treatments or no
treatment at all
• Traditional cover:
– ABI definition is Cancer excluding less advanced
cases, meaning that it requires cancer to be advanced
– Other providers only cover early stage cancers in
specific areas of the body, and often require treatment
• Why PruProtect?
– We cover early stage cancers in all parts of the body
– We are the only insurer to payout on diagnosis of low
grade prostate cancer, the most common cancer in
men
– We are the only insurer to cover non-malignant skin
cancers of a specified severity

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Heart
We cover all heart attacks
• Trends in heart disease:
– Heart disease is the UK’s biggest killer
– Preventative medication has helped to slow the
progression of heart disease
• Traditional cover:
– ABI definition requires heart attacks to be of a
specified severity, typical clinical symptoms and ECG
changes
– Some providers have widened their definitions, but
most still require multiple criteria to be met to qualify
for a payout
• Why PruProtect?
– We cover all diagnosed heart attacks
– It means if troponin levels have reduced by the time of
a positive diagnosis, customers would still qualify for a
payout

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Stroke
We cover all strokes
• Trends in stroke:
– There are1.1m stroke survivors in the UK
– 1/3rd of strokes lead to only temporary symptoms
• Traditional cover:
– ABI definition of stroke requires permanent
neurological deficit
– Other providers require either permanent neurological
damage or symptoms to have persisted for 24 hours
• Why PruProtect?
– We cover all diagnosed strokes, even if there is no
permanent damage or persisting symptoms

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Diabetes
We cover type I diabetes for adults, and help customers prevent type II
• Trends in diabetes:
– Over 3m suffer from diabetes in the UK
– Diabetes dramatically increases the risk of other
serious illnesses
– 80% of type II diabetes cases can be prevented
through lifestyle changes
• Traditional cover:
– There is no ABI definition for diabetes
– Only two providers cover type I diabetes, and apply
either age restrictions or the requirement for insulin
dependence
• Why PruProtect?
– We cover diagnosis of type I diabetes in all adults
– We uniquely help people to reduce the risk of type II
diabetes through our Vitality programme

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Improving customer outcomes
Likelihood of a claim payout before age 65
1.3 times
more likely to claim
on Primary SIC vs
CIC
2 times
more likely to claim
on Comprehensive
SIC vs CIC
Market leading CIC New Primary SIC New Comprehensive SIC
Likelihood of claim for a
female aged 30 at entry
Likelihood of claim for a
female aged 30 at entry
Up to twice as
likely to claim on
comprehensive
SIC compared to
market leading CIC
Source: Hannover Re UK Life Branch August 2013
1) Estimates are based on Hannover Re UK Life Branch’s interpretation of general population incidence rates and their estimated view of future
trends. Incidence rates for the general population may be different to those lives that take out life insurance products.
2) The market leading critical illness product is a comprehensive one and covers most conditions seen in the market
3) Estimates are based on the likelihood of making a claim before age 65.
4) Premiums based on PruProtect policy for a non-smoker with £100,000 of Life and SIC cover on 20 year term basis.

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Improving customer outcomes
Likelihood of a claim payout before age 65
1.3 times
more likely to claim
on Primary SIC vs
CIC
2 times
more likely to claim
on Comprehensive
SIC vs CIC
Likelihood of claim for a
female aged 30 at entry
£23.06 £26.36
leading CIC New Primary SIC New Comprehensive SIC
1.6 times
more likely to claim on
Comprehensive SIC
vs Primary SIC
1.1 times
extra cost of
Comprehensive SIC
vs Primary SIC
Source: Hannover Re UK Life Branch August 2013
1) Estimates are based on Hannover Re UK Life Branch’s interpretation of general population incidence rates and their estimated view of future
trends. Incidence rates for the general population may be different to those lives that take out life insurance products.
2) The market leading critical illness product is a comprehensive one and covers most conditions seen in the market
3) Estimates are based on the likelihood of making a claim before age 65.
4) Premiums based on PruProtect policy for a non-smoker with £100,000 of Life and SIC cover on 20 year term basis.

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Some of our unique claims to date
Our broad coverage means that we uniquely cover a number of
illnesses with our
Comprehensive cover, including:
Total Colectomy
Angioplasty(Coronary) or PTCA with or
Permanent pacemaker insertion
Chronic renal Impairment
without stent
Pulmonary Embolus
Surgical repair of depressed skull fracture
Surgical repair of detached retina
Acute renal Dialysis

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Louise’s claims experience
Although we made two payments to Louise for her illness,
she still has cover available if she needs to claim again
• Louise is still protected, even if she were to be diagnosed
with a new illness
• If the worse should happen and Louise dies prematurely,
her Life Cover offers the peace of mind that her family will
be financially supported
This is a example case study for illustrative purposes only. It has been
inspired by our customers
See our claims case
study for more
details

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Our award winning cover
Industry recognition
2009 2010 2011 2012 2013
2007- 2014 2008 - 2014

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What the experts say
Of all the covers available Serious Illness
Cover makes the most sense, it has the widest
base and severity at its heart.
The mistake I made was to develop the policy
to pay out on the diagnosis. It should be paid
out on severity…
Dr Marius Barnard,
Creator of Critical Illness
Dr John Delfosse,
August 2013

29. Serious Illness Cover Booster

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Traditional critical illness cover
Severity is an after thought with traditional cover
A traditional critical illness
policy pays out 100% on
most conditions….
…..and has a small
number of partial
payments
Payout
Conditions covered
Diagrams are only illustrative of how cover works

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Comprehensive Serious Illness Cover
Severity is fully embedded
Payout
Serious Illness Cover
may not pay as much
for some conditions….
Conditions covered
…but covers more
conditions and is more
likely to payout
Diagrams are only illustrative of how cover works

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Comprehensive Serious Illness Cover
Best of both worlds
Payout
Additional 10% boost for every child
named on the policy
For certain long term conditions it
boosts payments to between 100% and
200%, depending on age at claim
Serious Illness Cover Booster
provides a 100% underpin on
conditions typically covered by CIC
Conditions covered
Diagrams are only illustrative of how cover works

33. Additional covers and options

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Minimum Protected Account
The need to protect your protection
Traditional Critical Illness
Cover
ends
Claim 1
Heart attack
We are living longer and more of
us are living with more than one
illnesses
You cannot buy more cover once
you’ve made a claim with
traditional cover

35. His cover topped back up
to £100,000 with no
underwriting or premium
increases. This gave him
peace of mind that cover
still remains in place to help
him and his family in the
future.
35
Minimum Protected Account
Cover for multiple illnesses
Why Minimum Protect Account?
It protects the value of the plan account
when customers make a claim, so it
means:
– If you have more than one
illness, then you’re still covered
– You can claim up to 3 times
your original sum assured
Plan Account
with MPA
at 100%
Claim 1
reduces the
Plan Account
Claim 2
reduces the
Plan Account
Claim up to
3 times the
original level
of the cover
David bought a
Plan covering
£100,000 level
Life and Serious
Illness Cover with
100% MPA.
As he had chosen
100% MPA, his cover
was topped up to
£100,000 with no
underwriting or
premium increases.
Two years later David
suffered a heart attack
and received a 50%
payout under his
Serious Illness Cover.
Four years later David
suffered a stroke. He
received a 100% payout
and used the £100,000
to pay off his mortgage
and concentrate on his
rehabilitation.
With a traditional critical illness plan,
David would have received an initial
£100,000 payout but then his cover
would have ended.
Getting replacement cover would
have been difficult as many providers
would deem him to be uninsurable
after the first heart attack.

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Optional Serious Illness Cover for Children
Additional peace of mind for parents
• Cover that pays out if a child becomes seriously ill, to help
with the extra costs of travel, treatment, extra tuition and
time off work
• Your clients can purchase up to £100,000 extra cover for
their children, in addition to the £25,000 included within a
PruProtect Plan
• Your clients do not need to have Serious Illness Cover to
have this cover
Vitality Plus unlocks more rewards
Children also benefit from the Vitality Plus benefits of a parent. E.g. two
adults with Vitality Plus and two children with OSICC can claim 4 cinema
ticket codes each week

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Indexation
Protecting the value of your policy against inflation
• Help protect the value of cover against the effect of inflation
• We will increase cover and premiums each year based on current inflation rates
• Customers can refuse cover increases up to three times in a row
The value gap
The value gap widens with longer terms

38. Get more cover with Vitality Optimiser

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Vitality Optimiser
A new approach to protection
• Lower premiums: Vitality Optimiser gives an initial discount of up to 40% on protection
premiums
• Control: It provides a way to control your premiums each year
• +2% for bronze members
• +1% for Silver members
• No change for Gold members
• -1% for Platinum members
• Rewards: Customers also get access to all our reward partners for £3 per month
• Cashback: Customers can also get between £50 and £100 cashback if they engage with
Vitality. Joint policies get double cashback.

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Vitality Optimiser: A case study
Using Vitality Optimiser to help your customers buy up more cover
A 30 year old non smoker takes out £200,000 of Primary Serious Illness Cover on
an Essentials Plan with a 25 year term.
Cover Initial total premium
Serious Illness Cover £54.92
+ SIC Booster £60.16
+ Vitality Optimiser £54.14*
*Including the cost of Vitality Plus fee of £3 per month
Get SIC Booster for
the price of SIC with
Vitality Optimiser
Engage with Vitality to keep the
premiums low

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Find out more about our cover
Conditions covered calculator
Technical articles
pruprotect-conditions.co.uk pruprotect.co.uk/adviser/articles
Serious Illness Cover sales aid
Click here
Conditions covered sales aid
Click here

42. Serious Illness Cover
Innovative cover for a changing world