A lot of trained advisors would be of the same opinionthat Protection Insurance is necessary to the majority of families, whether it may be a precaution in the event of prolonged illness, premature death, cover for an accident or loss of employment (especially in the present economic climate),.
Life Insurance is the foundation of all financial assurance to ensure a lump sum that is not taxable, in the event of a death or for cover for a mortgage. Regrettably, a proportion of other Protection Insurance policies, do not have the samedo not have similar} reputable qualities and have been branded as being miss-sold. furthermore, based on what we know, critical illness insurance has suffered asa result of startling omissions from insurance policies making it feasible for insurance companies to reject claims even when they are genuine.
In spite of this, a little confidence was reinstated when Aviva gave details on the conclusion of claims on Critical Illness policies on their half yearly figures.
Critical Illness claims were being turned down because customers did not disclose their full medical history. As a result Standard Life says that in the last 6 months the amount of rejected claims has fallen substantially from 6.8% in the last year, to 1.6 per cent.
Why? We think, not simply Legal and General but all of the insurers, because of harmful public relations, have been put into a position whereby they must reduce the amount of claims that are rejected. Does this show how forceful the press can be? Debateable perhaps – you may think we are cynical but we think there are other issues that encouraged the insurance companies to make changes. Lately, as a result of |bad press|dire media}, sales of Critical Illness policies have dropped which in turn has obviously impinged on the insurance company’s profit. This was probably the catalyst that promoted the change!
Scottish Provident, Friends Provident, Axa and Norwich Union have instigated some important alterations specially created to decrease their rejection rates. To begin with, they outline clearly that all health disclosure, however insignificant a visit to a Doctor might have been, must be revealed. Friends Provident, amongst others will get a medically trained person to phone every applicant to discuss all the details of their medical history. If the policy then goes on risk, some policyholders are being informed that it is essential that they provide complete medical disclosure and they are allowed to add or correct any details on their application.
The insurer may then re-evaluate the risk and if it is believed to be increased the monthly premium will most likely be increased – which looks more rational and eventually more acceptable than paying the original premium then having a claim rejected owing to non-disclosure of health facts.
This process should have been taken by the Insurance Companies years ago as the public’s perception of Protection Insurance has deteriorated by their somewhat strange approach. On a positive note, there is a clear and necessary need for protection insurance so we can hope that it manages to re-establish trust and then the recognition it duly warrants.
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