Eagle Star is the latest life assurance company to cover all its existing and new serious illness policyholders, at no extra cost, against the risk of contracting AIDS/HIV as a result of a physical assault, regardless of their profession. (Scottish Provident was the first company to do so earlier this year.) Until recently, only specific professions - mainly health service professionals, police and prison officers were covered in the event they were infected while performing their official duties. Adding this provision is welcome, but has much to do with the fact that the much predicted epidemic of cases never happened and the incidence of AIDS/HIV is dropping in most western economies. Other insurers, says industry sources, will probably all follow suit in the relatively near future.

In an effort to become more competitive, Eagle Star has added a number of other features to their serious illness policy including the introduction of a personal accident income benefit and the widening of its surgical cash benefit to include people undergoing angioplasty (a coronary catheter treatment). The cost of this policy has also been cut for male non-smokers and the rate charged for hospital cash benefits have also been cut. The automatic child serious illness cover has also been increased from £10,000 to £15,000.

Eagle Star's changes to its serious illness policy suggest that "other companies will probably be reviewing their contracts shortly," one industry observer told Family Money this week. "With so much interest in serious illness cover as part of mortgage protection, it is a policy that is constantly being upgraded."