Defaqto has produced a critical illness guide for advisers.

The financial research company says the guide highlights the opportunities that critical illness cover offers advisers and provides guidance on how advisers can take advantage of the potential in this sector .

In the guide the firm argues that the value of a critical illness policy is not just about the number of illnesses covered, but about whether a policy covers the conditions that people are likely to need to claim on. Defaqto research confirms that claims are dominated by a small number of illnesses, including cancer and heart attacks which are on average responsible for 60% and 10.2% of claims respectively.

Defaqto’s guide indicates that in the last year providers made 11 enhancements to existing propositions. These product developments confirm the trend towards enhanced definitions (ABI+) and away from reliance purely on the number of conditions a policy covers.

At the same time, Defaqto research indicates that the pace of increase with regards to the number of conditions policies cover has slowed dramatically in recent years – since March 2009, the average number of conditions covered has increased by just two, from 34 to 36.

From an adviser perspective, a Defaqto survey found that the majority of intermediaries questioned – 72% – favoured better definitions over a high number of critical illnesses. Although providers are in essence delivering what the adviser community seems to want, the key issue is how advisers can convert the potential value of critical illness into sales.

If advisers are able to demonstrate the benefit that critical illness protection can provide for their clients, they will be able to restore consumer confidence in the product and, ultimately, create value for their business, Defaqto says.

The guide can be downloaded for free at: &lta href=&quothttp://www.defaqto.com/adviser/ifa/guides&quot&gtwww.defaqto.com/adviser/ifa/guides&lt/a&gt.

Ben Heffer, Defaqto’s insight analyst for life and protection, said: “The challenges facing the critical illness market are those facing the protection market generally