VITALITY.CO.UK

COMPETITOR PROFILE

FRIENDS LIFEFor internal use only

Who are Friends

Life?

Heritage: Manages the back-book

Heritage: Manages the back-book

UK: Provides core business lines

UK: Provides core business lines

International: Provides products for expats

and local nationals in Asia and Middle East

International: Provides products for expats

and local nationals in Asia and Middle East

Source: friendslifegroup.com

Friends Life

individual

protection

4th in the IFA market

Source: ABI Q2 2014 protection market share report

Individual

Protection suite

Protect +

CRITICAL ILLNESS COVER

Friends Life critical

illness in numbersConditions covered (full payment) - 40

Partial payments - 11

ABI+ - 16

Child cover conditions - 55

Source: Friends Life Critical Illness product literature

7

Whole of body

coverage

• VitalityLife provides wider cover in the majority of body systems

• Extremely limited cover from Friends Life for gastrointestinal, connective tissue, urogenital & kidney disease

• Vitality Life payout under Serious Illness Cover may be the less than , the same as or more than the amount payable by Friends Life

Source: VitalityLife head-to-heads

8

100% payouts

With Serious Illness Cover Booster VitalityLife covers 18 more conditions with 100% payout than Friends Life

Serious illness cover booster - the best of both worlds

Source: VitalityLife head-to-heads

9

Deep dive - CancerWhy VitalityLife for cancer

•Friends Life does not specifically cover • Myelodysplasia • Marrow aplasia• Carcinoma in situ of the oesophagus• Non melanoma skin cancer (except where

metatstatic)VitalityLife does!

•VitalityLife covers low grade prostate cancer on diagnosis to a maximum of £750,000 – Friends Life requires specified treatment.

•Friends Life partial payments limited to maximum of £12,500 or £25,000

•VitalityLife covers ALL carcinoma in situ irrespective of the site or treatment. Friends Life only covers CIS of the bladder, cervix and DCIS of the breast

More likely to payout compared to industry standard definitions

87%

Regular exercise, healthy diet and not smoking reduce a persons risk of cancer by around 40%

Source: VitalityLife head-to-headsmacmillan.org

10

Deep dive –

Heart & Artery

Why VitalityLife – heart & artery disease

•Examples of conditions/treatments Friends Life does not cover

• Angioplasty to correct carotid artery stenosis

• Balloon valvuloplasty• Cardioversion for cardiac arrhythmia• Femoral artery anuerysm repair• Permanent pacemaker insertion• Surgery for cardiac arrhythmia

•Friends Life definition for angioplasty is very restrictive as it only covers treatment where 70% narrowing of 2 or more arteries is present. VitalityLife definition covers all coronary angioplasty.

•Friends Life maximum payout for angioplasty is £25,000. VitalityLife maximum is £300,000

VitalityLife covers up to 29 conditions compared to Friends Life’s 12

Just an hour of moderate exercise each day can reduce the risk of heart failure by 50%

Source: VitalityLife head-to-headsnewsroom.heart.org

11

Deep dive –

Stroke & Nervous

System

Why VitalityLife – stroke & nervous system

•VitalityLife covers 45 conditions – Friends Life covers 21

•Vitality Life definition of multiple sclerosis only requires current symptoms. Friends Life definition requires 2 attacks and MRI evidence.

•VitalityLife covers all major neurological definitions on diagnosis – Friends Life definitions require permanent neurological deficit or current symptoms

•VitalityLife covers procedures such as • Craniotomy, • Guillain-Barre syndrome, • Surgical repair of a depressed skull

fracture, • Loss of muscle power resulting in the

inability to grip,none of these are covered by Friends Life

VitalityLife covers over twice as many stroke & nervous system conditions as Friends Life

Source: VitalityLife head-to-heads

12

Additional payment

conditions

Condition Friends Life

VitalityLIfe Comment

Carcinoma in situ of the cervix uteri - requiring hysterectomy

12.5%/£12,500 5%/£150,000Higher maximum payout from VitalityLife with no requirement for treatment

Carcinoma in situ of urinary bladder 12.5%/£12,500 5%/£150,000 Higher maximum payout from VitalityLife

Cerebral aneurysm - with surgical repair 12.5%/£12,50015%/£450,00025%/£750,000

Covered by VitalityLife with higher payouts

Cerebral arteriovenous malformation – with surgical repair

12.5%/£12,50015%/£450,00025%/£750,000

Covered by VitalityLife with higher payouts

Coronary Angioplasty 25%/£25,000 10%/£300,000Covered by VitalityLife with higher maximum payout. VitalityLife definition does not require multi-vessel disease or specific narrowing.

Crohn’s disease – requiring surgical intestinal resection benefit

12.5%/£12,500 50%/£1,500,000Covered by VitalityLife with higher payout. VitalityLife also includes moderately severe inflammatory Crohn’s disease at severity F with no requirement for surgery.

Ductal carcinoma in situ of the breast - with specified treatment

12.5%/£12,50010%/£300,00025%/£7500,000

Covered by VitalityLife with higher payout. VitalityLife also covers mastectomy for lobular carcinoma in situ

Low grade prostate cancer 25%/£25,000 25%/£750,000Higher maximum payout from VitalityLife with no requirement for treatment

Non-malignant pituitary adenoma – with specified treatment

12.5%/£12,500 10%/£300,000Higher maximum payout from VitalityLife

Removal of one or more lobe(s) of the lungs – for disease and trauma

12.5%/£12,500 25%/£750,000Covered by VitalityLife with higher payout

Significant visual loss 25%/£25,000 100%/£3,000,000 Covered by VitalityLife with higher payout

Lower maximum payouts and restrictive definitions mean Friends Life additional payments offer little value

Source: VitalityLife head-to-heads

13

Question

For presentation purposes only. Not for use with customers.

Name four other benefits that Friends Life offers, but VitalityLife doesn’t?

Red Arc, Fracture Cover, Road to Health, Winston’s Wish

Fracture Cover, accelerated payment for surgery, Best Doctors, Reinstatement (buyback)

Helping Hand, accelerated payment for surgery, Reinstatement (buyback), Best Doctors

a

b

c

Accelerated

payment for

surgery

Acceleration payment benefit for specified surgical treatments

Friends Life will provide an advance payment of 25% of the critical illness benefit (maximum

£25,000) if the member is on the NHS waiting list for one of the following types of

surgical treatments:

• aorta graft surgery

• coronary artery by-pass grafts

• heart valve replacement or repair

• open heart surgery

To be eligible for this acceleration payment benefit, the member must be on the

relevant NHS waiting list for the hospital where it is proposed the surgical treatment

is to take place.

Benefit will be reduced by the amount of the Accelerated payment made. This haspotential to make a split trust ineffective for IHT purposes.

Acceleration payment benefit for specified surgical treatments

Friends Life will provide an advance payment of 25% of the critical illness benefit (maximum

£25,000) if the member is on the NHS waiting list for one of the following types of

surgical treatments:

• aorta graft surgery

• coronary artery by-pass grafts

• heart valve replacement or repair

• open heart surgery

To be eligible for this acceleration payment benefit, the member must be on the

relevant NHS waiting list for the hospital where it is proposed the surgical treatment

is to take place.

Benefit will be reduced by the amount of the Accelerated payment made. This haspotential to make a split trust ineffective for IHT purposes.

Potentially creates an unwelcome IHT problem

Source: Friends Life Critical Illness product literature

Reinstatement

Option

Following a claim for critical illness cover it allows the claimant to apply for Replacement cover subject to a number of hurdles:

• Cover cannot be reinstated for at least 12 months following a claim• The conditions covered will be limited to 17 conditions excluding that which caused the claim • Cover is limited to £100,000• Maximum age 50

The premiums for the new cover will be based on premium rates and themember’s age on the commencement date of the new policy.

Immediate reinstatement

Full cover reinstated

No additional Exclusions

No new premium

No age limit for reinstatement

Can be added at any time

No comparison to MPA

Source: Friends Life Critical Illness product literature

Friends Life

Fracture Cover

Option costs £2pm

Payments between £900 and £2,100

Does not cover children

Popular benefit with some advisers

Source: Fracture Cover product literature

Best Doctors

• This is a non-contractual benefit and can be withdrawn at any time

• Covers all customers together with spouse and children

• Treatment recommended is NOT funded by Friends Life so customers will need to use their own resources or rely on the NHS to provide treatment

An adviser who likes the concept of Best Doctors must also be receptive to a conversation about VitalityHealth.

Non-contractual

Source: Best Doctors product literature

18

Children’s cover• Cover children for 50 of 51 conditions (excluding type 1 diabetes)

• Benefit paid once per child

• Cover provided if child requires intensive care for seven consecutive days due to sickness or injury

• Children covered under the accelerated payment benefit for specified surgical treatments

• Child funeral benefit also offered

• Offer a maximum of 50% of main benefit up to £25,000 on child claims (we offer up to £100,000 worth of cover on OSICC)

• Additional cover provided for congenital conditions

• Cover children for 50 of 51 conditions (excluding type 1 diabetes)

• Benefit paid once per child

• Cover provided if child requires intensive care for seven consecutive days due to sickness or injury

• Children covered under the accelerated payment benefit for specified surgical treatments

• Child funeral benefit also offered

• Offer a maximum of 50% of main benefit up to £25,000 on child claims (we offer up to £100,000 worth of cover on OSICC)

• Additional cover provided for congenital conditions

Lower maximum payouts means Friends Life’s child cover offers little value

Cerebral palsy

Cystic fibrosis HydrocephalusMuscular dystrophy

Spina bifida

Genetic condition and people with

family history will be excluded

Genetic condition and people with

family history will be excluded

Linked with hydrocephalus so little added

value

Linked with hydrocephalus so little added

value

Source: Friends Life Critical Illness product literature

Optimiser Option

Whole of Life cover

Ability to reduce future premiums

Optional SIC for Children

Healthy living programme

An incomplete

and inferior

proposition