The rationale for setting up a new insurance protection product.

Very few new financial services products are created in today's marketplace and when they are, they often tend to be presented as being innovative, whilst in reality they are just variations on established themes.

MediCheque's Medical Recovery Insurance Plan is one such product that breaks this mould that adds value, services a need for affordable protection and complements their existing other product offerings. The inspiration for MediCheque grew out of a desire to offer a valuable and affordable medical component which would form part of that product suite, one which would appeal to a broad cross-range of people, whether or not they had private health cover.

Traditional cash plans give people money, but relatively small amounts for each night spent in hospital as opposed to the length of recovery time or time off work. Income protection plans exist but tend to be costly, they also normally have waiting times before a claim can be made of at least a month, often longer. Recognising that recovery periods can vary with the operation performed, the challenge in creating our plans was to create a benefits structure that recognised not the cost of a medical procedure but instead the normal recovery time.

To understand our plans and how they work, one needs to understand two things. Firstly that the cost of an operation in hospital can bear no correlation to the recovery time (for example a pacemaker insertion has a recovery time of just a few days) and secondly that anyone going into hospital, whether for an emergency operation such as a broken bone or for a planned procedure, will have additional costs and expenses as well as potential lost income.

Clearly in many countries there is an issue with staff absence. You can't force people to come to work but having run a business with employees I believe that the onus should always be on the employer to create a working environment that people want to turn up to. This becomes more of a challenge as companies grow and of course many working environments can be difficult or demanding. But generous sick pay schemes can actually encourage prolonged absence if the employee is not of the will to return to work. In addition employers can face issues of presenteeism where employees return to work whilst not fully fit, so for both reasons the idea of creating an affordable sick-pay scheme with defined recovery periods seemed to us to have merit.

We believe that a core attraction of our plans is that by focusing on causes that unquestionably require an employee to be physically absent, they can be offered as affordable sick-pay schemes by larger employers but also have real value to smaller companies and the self-employed (imagine a plumber who cannot use an arm after shoulder surgery or kneel after knee surgery) where people want or need to be present as opposed to being absent.

As our plans focus on medical procedures (which can include treatments of accidents in the work place as well as normal planned operations) we do not cover stress. However only a very small number of employees have severe mental health problems that are incompatible with working and according to Tony, most employees with common mental health problems such as mild to moderate depression, anxiety and stress can continue to work. In most cases work is actually beneficial to their recovery even if they only work reduced hours or reduced duties

Some employees will always be off sick for very long periods of time. For example after serious accidents where they need several sequential surgical procedures after weeks spent in intensive care; they may be off work for a year or more.  But any product covering this situation would require individual assessment, which would be both expensive and subjective.  This would be the opposite of what we are trying to achieve with our plans which is a simple, affordable and easy to buy product, one that gets away from the problems of such subjective assessments.

The flexibility of our plans is such that they can be bought alongside insurance plans which are more suited to any long-term disability. Our plans are there to help people cope when they can’t work for the first six months. They are  designed to reduce an employee’s desire to return to work at a point where they are unlikely to be able to cope with work and therefore might well be putting themselves and/or their employer at risk by trying to work. By remaining off work they will recuperate and provide a better service once they return. An employer considering investing in a medical recovery insurance plan is likely to support such a concept. It is the equivalent of ‘sick pay’, but with payment limited so it is sufficient but does not encourage employees to remain off longer than necessary.

For people that already have sick-pay schemes in place or are not earning a salary our plans are also designed to appeal by providing cover for the expenses incurred from a medical procedure. For example they may wish to fund additional physiotherapy and treatments not covered by private or state-funded medical insurance, they may wish to take a holiday to help with recuperation, spouses may wish to stay at home to look after children (if they have bought cover for their children) or they may not be able to care for a pet, so the benefit could even cover kennel charges.

When offered as a voluntary plan, for example as a flexible benefits offering some of the benefits of adding our plans include the fact that sick pay may represent basic pay only, not overtime. Also a spouse may wish to stay at home for a while to help care for an employee after surgery, a person may wish to fund additional physiotherapy or additional treatment and drugs, they may wish to take a holiday to help with recuperation or they may not be able to care for a pet, so the money could cover kennel charges. In addition employees will often also return to work in a better frame of mind if they have had a cash windfall to assist with the above so employers should be supportive in offering the plans to their staff.