Insurers are finding that while life protection claims are reducing, they are having to finance more and more claims on CIC plans.  The effect of this is that the cost of CIC is becoming a lot more expensive than life cover.  If the number of CIC claims dimish then understandably the cost of premiums will fall too.

The cost of Direct Line and Swiss Life’s CIC has rocketed by about 19 and 24 percent respectively.  But the likes of Liverpool Victoria and Norwich Union win in the price rise race with increases of up to 65%.  Other insurance firms are attempting to charge more for CIC as well as the sector believes over the meaning of ‘life-threatening disease’ and medical science makes great improvements in the management and control of certain conditions.

The Association of British Insurers has identified policies for heart problems and prostate cancer, for example.  If these medical issues are discovered early on they are not then deemed to be ‘life-threatening’, at least for some people.  Another example is diabetes.  Right now Tesco is the only insurance organisation which still allows this condition on its inventory of critical medical issues covered.

A CIC cover option usually is for an agreed term, for example on a par with the length of time on a mortgage, and there is no movement in the premiums.  The fees are costly for this protection plan.   Insurance firms are now looking to offer reviewable plans where both the ailments covered and the regular payments paid are reviewed every four years, which should be cheaper.

Ray Milkins, senior manager of the independent financial adviser division of Liverpool Victoria, thinks that more people will choose the reviewable cover options as they become better value than the guaranteed plan.

Bradford & Bingley continues to provide a guaranteed CIC but has put its fees up for that.  It has introduced a reviewable cover option as another choice.  C&G and Skandia have stopped providing guaranteed CICs.

Reginald Morton, protection director at Bradford & Bingley, declares, “The reviewable cost will be normally [around] 15 per cent below the guaranteed option.”

An existing guaranteed CIC scheme cannot be updated to redefine any medical issues which are now identified as ‘life-threatening’ but which may not be in that category in the future.  So if you have this type of policy already and are ok to pay the financial amounts you do not have to be troubled.

If you are deciding to take out a CIC scheme expect to pay a smaller amount for a reviewable cover option.  But if you want the extra wellbeing a guaranteed policy gives, get it fast while there are still some available, and don’t forget you’ll have to pay a little more.

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The quickest way to get paid
It is regularly a benefit to draw up your insurance plan in trust as it is then excluded from your assets and also, from inheritance tax. In addition, your loved ones will not have to wait for probate, enabling them to be supplied with their inheritance sooner, just at the most beneficial moment.

Two policies are usually better than one
Fees differ significantly, so look around for the best proposal.

You can choose between obtaining a double scheme, which protects both of your lives, or you can each have an insurance policy. Your preference will be subject to what the policy is wanted for.

A joined-up plan to protect your house loan
When covering your home loan, your scheme will pay out on the expiry of the first person covered by the policy. Both of you need to be insured for a matching value and there is no need to maintain the policy, as the mortgage will have been balanced off.

An exclusive plan for protection of dependents
If you are weighing up a policy for protection of dependents, couples are recommended to have a single scheme, for many reasons.

One person could be fitter and less old than the other, or even one of them is doesn’t smoke and will therefore be able to pay lower rates. Each person will usually desire a different level of cover, as their income will be different one from another.

A surviving partner, who could be left with dependent kids, will continue to require life plan until their offspring are adults. If there is just one policy between the two of you, then the surviving partner will be left without insurance if their partner expires.

Regular payments are evaluated on the health and age of the applicant at the time when the scheme is fixed. If the surviving partner becomes ill as they get older, then new plans will be more expensive, and, in extreme cases, be rejected.

If you decide to take two separate plans, they can be on unlike terms and for unlike amounts to suit your personal requirements. They will both pay out on the death of  your spouse or yourself within a fixed duration, but a joint policy only pays on the expiry of the first or last spouse. It may amaze you to find out that having two plans can often be cheaper than having 1.

Reconciling Life Schemes
There are people, who may choose to cash in their life insurance specialists plan because they have been diagnosed with a  a gravely serious health problem or need very high cost treatment, which they had not anticipated and don’t have enough money for. Faced with such hurdles, it is simple to see why an individual might decide to cash in sections of a life insurance plan to pay for expensive and long term care. However you should acknowledge that penalty prices may be imposed.

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The main financial regulating body published its worries four years ago that many thousands of people with insurance failed to appreciate what their policies covered. Those fears are still valid.

The City Regulator, the Financial Services Authority (FSA)announced that data showed that insurance providers, including financial advisers, supermarkets, insurers and banks often made little effort to understand if the insurance was appropriate and no explanation was provided to customers of how policies works. While most business organisations were working to adhere to improved standards, others carried on offering a poor service.

In the event that heart disease, stroke, canceror other listed life-threatening illnesses strike, critical illness cover, insurance pays out a lump sum. Inevitably, it is clients who are concerned about repaying  mortgages and loans if they become unable to remain working, who purchase these plans.

There are two kinds of policy: those policies where the premium is fixed for ever (a guaranteed premium) and those where the payments increase over time. Figures from the ABI show that, alltogether, there are over of 5 million insurance policies covering 11m people. An average policy will pay out sixty eight thousand pounds.

These “protection” policies have proved to have critics. While the ploicies might beuseful, these “protection” insurance plans have proved controversial and critics allege that not many policyholders make claims. There is no data available on the numbers of policyholders making a claim made in comparison with the total expenditure on the premiums. The City Regulator review did reveal, however, that on average, 25 per cent of the claims made are refused.

Recently, in one case a insurance holder was found to have with cancer but medical teams could not identify which one. The customer was told it was unlikely the medical team would know for certain until he was dead.

Until the specialist doctors could diagnose what type of cancer he had, his life insurance company would not pay out. The policyholder’s family appealed realising that should he die, the plan would pay out a life insurance plan worth £25,000 rather than the critical illness planwhich was worth some £80,000 as only one policy was scheduled to pay out. The argument with the insurance company caused added stress to the client. After a report in the press, the insurer agreed with the client’s legal team and paid out on the policy.

Which?, previously known as the Consumers’ Association,  said it thinks the situation is significantly more serious than the FSA claims and that sales of critical illness cover are at the centre of a far-reaching mis-selling problem.

Michael Chunkline, principal policy specialist, says brokers, commission-hungry advisors and finance companies, saw a chance to make considerable earnings. He said the Consumers’ Association had forecast the mis-selling that was common in the promotion of payment protection insurance and pensions and would be replicated in the critical illness business.

His predictions are on the back of complaints in in government regarding the mis-selling of critical illness policies. Simon Curzon, the MP, says the FSA’s study shows there is a significant risk that insurance are being sold to clients who don’t appreciate what they are buying or who don’t even need them. The MP wants rule changes at the FSA that would limit sales to financial advisers working under strict guidelines.

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Ian Marsh, head of investments at Cambridge based financial adviser Peel Townsend Financial Services, cautions that it is very short sighted of people not to compare Life Insurance and/or Critical Illness Cover as he maintains that life has 2 potential risks – either being alive too long and passing away too soon.  “Its absolutely vital to have some cover in place – particularly if youve got a young family,” he states. “In these unsettled times you must construct your own little stronghold because no one else is going to do it for you.”

Richard Hart at Direct Line says now is the best time to purchase such policies as there are lots of very competitive premiums around due to to the fierce vying for business within the market. “The cost of  life insurance cover has fallen – gone down by about 45% in 5 years. It has never been so cheap,” he adds. “The critical illness insurance market paid out on eighty five per cent of claims in 2007 – rising from eighty one per cent  the previous year.”

Check what insurance cover you already have before you take out any more.  Do already own any investment plans or does your works pension plan give you any cover?

The easiest way to work out how much insurance you require is to calculate how much you would need to have the same standard of living over a year and then times it by twenty years.  The minimum amount needed should settle all debts and and leave a lump sum for your family.
Make sure you get a really good deal.

When deciding on your policy it is very necessary to read the manual that many life insurance companies have of the illnesses and conditions that they include. It will list everything and should be clear-cut and easy to grasp.  You will also need to review the documentation of the main points of the insurance which will contain all exclusions and benefits.

When a person takes on the responsibility of a home loan they are more often than not recommended to take out critical illness protection but should research the market and not just take the first policy proposed.

If you commence paying these insurances when you’re younger they are noticeably cheaper, very different to leaving it until you are older, when the policy goes up quite considerably.

Insurance payments can also be reduced by giving up smoking.  April Holmes, manager of protection at AxA Insurance states ” as well as giving a longer and healthier quality of life, giving up smoking can save people a vast amount of money.”

If you stop smoking you can knock as much as a 1 3rd off life insurance, critical illness  insurance and income protection insurance payments because the evidence that we now have proves that smoking can trigger serious illness and exacerbates any other existing health conditions.

If your circumstances alter you may need to review your insurance cover. By no means believe that once you have purchased your insurance policy that you can just continue with your life and think no more of it. At all times be very aware of the insurance you have and ensure that, should your situation change, or, is going to alter your insurance cover must accommodate these alterations.  Perceivable examples are moving jobs, or or maybe you would like to have more children; regularly consider everything that may increase your costs to live and will need to to be covered if you are taken ill and are unable to work.

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Not manyprofessional financial advisors would’nt disagree that life insurance should be the basis of most family’s financial planning whether it’s safeguarding against the detriment of early death, accident, long term illness or (particularly now with the arrival of the credit crunch), cover for unemployment.

Online life insurance cover is rightly the foundation of financial planning whether it be used to protect your home owner loan or provide a tax free lump sum for your family in the event of your demise. Unhappily, some other kinds of protection cover have a less desirable reputation. Payment Protection Insurance Cover has a reputation for being miss-sold and critical illness insurance has historically suffered from rampant policy exclusions which allowed the insurers to reject an extremely large number of claims, even if they appear valid.

But last week a glimmer of light transpired when Standard Life made known its 1st 1/2 figures on the resulteffect of claims on its critical illness policies. These numbers seem to mean that at last the question of unintentional disclosure of health details when the policy application is completed, is being resolved.

Only a few years ago critical illness cover claims were being constantly turned down on the merest suggestion that the client had omitted any slight medical condition – even a foot infection or a sore throat! Consistent with the figures reported by Standard Life, their claim rejections have fallen sharply from 6.8 per cent last year to 1.5 per cent in the previous 6 months.

Why is this? Norwich Union, Friends Provident, Scottish Provident, Axa, LV, and Scottish Equitable  have put forward a variety of alterations intended to diminish their refusal rates. They begin with an utterly obvious explanation of the importance of complete health disclosure right down to when they last visited their Doctor no matter how slight the reason. And some insurers such as Legal and General get a medically trained person to phone each potential client to talk through their health history in more detail. Then when the insurance policy goes on risk, some insurance companies are telling again the insurance holders of the requirement of full medical disclosure and allowing them the chance of adding or correcting the details on their submission form.

If the additional details are assessed as increasing the insurer’s risk, then the insurer will certainlywithout doubt increase the monthly premium – but that is definitely far better than paying the original premium for years and years and then getting a claim refused.

The insurers should have taken path a long time ago as their softly, softly method has dented the public’s perception of protection cover. After all there is an absolute need for protection cover so let us pray that it achieves the reputation its so richly deserves.

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Not Many expert financial advisors would dispute that protection insurance cover should be the foundation of most peoples financial planning whether it’s protection against the damage of premature death, cover for unemployment (particulary now with the arrival of the credit crunch), long term illness or accident.

Life assurance is rightly the bed rock of financial preparation whether it be put in place to cover your home owner loan or provide a tax free lump sum for your dependants in the event of your demise. Alas, some other forms of protection insurance have a less desirable reputation. Payment Protection insurance has a name for being miss-sold and critical illness cover has formally suffered from extensive policy exclusions which make it possible for the insurers to decline a high proportion of claims, even if they seem authentic.

But last month a shimmer of light materialised when Scottish Provident made known its first 1/2 figures on the outcome of claims on its critical illness policies. These numbers appear to signify that at last the problem of unintended disclosure of health particulars when the policy application is concluded, is being resolved.

Not long ago critical illness cover claims were being routinely rejected on the merest suggestion that the client had omitted any slight medical detail – even a foot infection or a sore throat! In line with the figures reported by Legal and General, their claim refusals have dropped sharply from 6.8 per cent last year to 1.7% in the previous 6 months.

Why has this happened? Norwich Union, Friends Provident, Scottish Provident, Axa, LV, and Scottish Equitable  have put forward a range of adjustments planned to reduce their refusal rates. They start off with an utterly obvious explanation of the magnitude of complete medical disclosure right down to when they last saw their Doctor no matter how inconsequential the cause. And some insurers such as Axa get a medically trained person to telephone each potential client to discuss their medical history in detail. Then when the life insurance quote goes on risk, some companies are telling again the policyholders of the requirement of full medical revelation and giving them the option of correcting or adding the information on their application.

If the latest details are assessed as increasing the insurer’s risk, then the insurance company will inevitably increase the monthly premium– but that’s surely far better than paying the original payment for years and then having a claim rejected.

The insurance companies should have taken route years ago as their softly, softly style has dented the consumer’s assessment of protection insurance cover. Nevertheless there is an unquestionableneed for protection insurance so let us hope that it gets the popularity its so rightly deserves.

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Nothing is more disturbing in life than to be diagnosed with a serious or severe condition. Matters are made a thousand times worse when your insurer tells you that they will not pay out on your critical illness cover or private health insurance for the Cancer or HIV you are suffering from .

You are told to peruse sub-clause four of paragraph 325 of the small print, which informs you that you have got the  wrong type of cancer. Only tumours below the knee are covered and only the first five days of your treatment will be paid for, then it is up to you to find the money.

This situation may sound absurd, but even though insurers and brokers are regulated, this type of procedure continues togo on. It has been a long drawn process to clean up the industry and to ensure consumers get a proper deal.

A short time ago Cancer Backup, a well known charity, emphasizes this problem by arranging a wide ranging mystery shopping surveys, which exposed some disturbing facts about the private health insurance companies. It discovered that of nearly all the leading insurers only PPP gave cover for cancer patients throughout the period of their illness. Only  the initial treatment is covered by most of the health insurance companies. Care or treatment over a prolongedperiod of time, such as hormone replacement or chemotherapy is normally excluded.

Even though insurance companies and brokers want to finance long term cover for policyholders with severe illnesses, they won’t always make it clear to likely clients, at the time of taking out the policy what they are covered for.

While both  Cancer Backup and Macmillan Cancer support have been in consultation with comparableestablishments within the industry to raise the standard of sales practices and make the phrasing of policy documents much clearer, progress has been slow since the report was published two years ago.

Critical illness cover and private medical insurance  is normally taken out by people who are quite hale and hearty. The last thing that crosses their minds is getting cancer. That is why it is so essential to specify a policy’s exclusions before they sign.

A report of best practice for insurance companies writing and selling medical policies has been updated recently by the Association of British Insurers, which is a much needed step in the proper direction.

The market body has now suggested that insurance companies and providers selling these kinds of insurance should orchestrate similar case studies, which clarifies the circumstances when an insurance policy will or will not be paid. Sadly insurers no requirement to adhere to this code, which is voluntary.

Although the ABI’s initiative is to be welcomed, the best way of amplifying an insurance policy is by getting the salesman to explicate the small print.

In addition, industry terminology is in spite of everything even now being used by insurance companies to confuse the consumer. For example it is wrong to grade cancer as an acute or chronic illness, deliberates Cancer Backup. However insurers are resolute that it should go in the chronic category. clients are only informed about this when their claim is rejected.

Although the ABI have got their responsibilities right, the insurance companies can only be forced to better their standards by the regulator. Better training of tele marketing staff, who sell the majority of the policies, is also long overdue.

More precise marketing procedures are needed with jargon being removed. Ultimately it remains the responsibility of the insurersinsurance companies to ensure that their customers are fully aware of the terms of their insurance cover before they commit themselves.

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