If you have to make a claim on your critical illness insurance policy, the last thing you want is for your insurance company to be insensitive or act like they don't care. But that's exactly what's happening, according to many news stories. The main problem is that the insurance company will always want to know everything about your health history before they will pay out. Even though you will have given them a lot of similar information...
If you have to make a claim on your critical illness insurance policy, the last thing you want is for your insurance company to be insensitive or act like they don't care. But that's exactly what's happening, according to many news stories. The main problem is that the insurance company will always want to know everything about your health history before they will pay out. Even though you gave them a lot of the same information when you first applied for the policy, the insurers will now want to check all of that information again. And if you said you didn't smoke at the time, they'll now want to check with your doctor to make sure.
It's easy to see why. When they get a big claim, usually more than £100,000, they want to make sure you told them the whole truth about your health when you first applied. This means that now that you've filed a claim, they'll go through your medical records very carefully to make sure you told them everything you needed to on your application. Every little thing that doesn't seem important will be closely looked at. The problem is that all of their letters can be very stressful for you.
The insurance companies say that their rules are necessary because they need to know that you told them the whole truth about your health when they accepted your business. They want to make sure you didn't lie by leaving out some information to trick the company into giving you a policy when they might not have otherwise or to get a lower rate. Non-disclosure, which is what they call cheating, is a good reason for them to deny your claim. Even if the information you left out had nothing to do with the illness that led to the claim, it doesn't matter. The insurance company says that every piece of information you give is used to figure out your premium, and if you leave something out, it changes the way the premium is calculated.
When a claim is made in the first five years of a policy, insurers are especially suspicious. Any claim that comes up during this time is called a "early claim," and insurers keep a close eye on policyholders who bought critical illness insurance when they already thought they were sick.
The problem is that all of this close attention leads to a lot of bad news. When you're sick and upset, the last thing you want is for your insurance company to ask you a lot of questions and be rude.
There's no doubt that there's a problem. If insurance companies want to stop getting bad press, they need to work much harder to make the inquiry process easier and work with their claimants much more closely. At a time when their claimants are going through a lot of stress, insurers need to show a much softer side.
All of this bad press has hurt the critical illness insurance market in two ways. Applicants have been favouring insurers with the lowest rejection rates, and some have stopped trying to get insurance at all.
In reality, it doesn't help much to stay away from insurers with high published refusal rates. That's because the numbers that are put out there can be wrong. The most recent numbers show that Scottish Equitable Protect has turned down 28 percent of critical illness claims. Friends Provident is close behind, with 25 percent of claims being turned down. When you compare these numbers to Scottish Provident's 13.7 percent, it's easy to see why many people who might buy a policy would choose Scottish Provident. But that might not be the best thing to do.
The problem with figuring out what these numbers mean is that they can be skewed by how long an insurance company has been in the critical illness market. Since policies that have only been around for a few years have the highest rejection rates, companies that are new to the critical illness market will also have the highest rejection rates. This makes it look good for companies like Guardian Financial Services, which has a rejection rate of only 10%. The Guardian has been around for more than 15 years and has a mature book of business.
And it's too bad that all this bad press has made people less trusting of critical illness insurance. We think that this insurance is important for protecting family finances, but people are being discouraged from buying it. This means that if someone in the family gets sick, the whole family could be at risk. After all, if the person who brings in the most money gets sick, the family's income can drop. This means that the lump sum paid out by these policies, which isn't taxed, can be a big part of how a family stays financially stable.
If you think you need critical illness coverage, you should go for it. But keep in mind that these policies vary a lot in what they cover, so comparing prices alone doesn't really tell you much. Basic plans cover one or more of the most serious conditions, but comprehensive plans cover many more, such as:
Alzheimer's disease
Aorta graft surgery
Aplastic anaemia
Meningitis caused by germs
Noncancerous brain tumour
Blindness
Cancer
Cardiomyopathy
Long-term lung disease
Coma
By-pass surgery on the coronary artery
Creutzfeldt-Jakob disease
Deafness
Dementia
A heart attack
Heart valve replacement or repair
HIV or AIDS can be spread by a fight, a blood transfusion, work, or an accident.
Keyhole surgery on the heart
Failed kidneys
Loss of being able to live on their own
Amputations
Loss of words
Major organ transplant
The disease Motor Neurone
Multiple Sclerosis
Paralysis/Paraplegia
Parkinson's illness
Supranuclear Palsy That Gets Worse
Stroke
Burns of a third degree
Complete and permanent inability to work
Protect children
Because this is so complicated, you should really get advice from someone else. You can get help from a lot of websites. Just search for "critical illness insurance" and make sure you can talk to an advisor before you buy.
