Summary:
Protection Insurance is a necessary product, will it become more popular? The insurance industry is at last making the right moves. We are hoping that they succeed. This article gives a clear explanation.
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.
