|
Home / Finance / Insurance
Critical Illness Insurance The Non-Disclosure Problem
By:Michael Challiner
If you're in the unfortunate position of having to make a claim on your critical illness insurance policy, the last thing you want is insensitive hassle or apparent non co-operation from your insurer. But according to numerous newspaper articles, that's precisely what's happening. The core problem is that before they'll pay out, the insurer will always want to make exhaustive enquiries about your past health record. Whilst you'll have provided them with lots of similar information when you initially applied for the cover, the insurers will now insist that all the information is rechecked. And if at the time you said you weren't a smoker, they'll now want this verified by your doctor.
The reasons are obvious. They're faced with a big claim, typically way over £100,00, and they want to be certain that you told them the entire truth about your health when you first applied. This means that now you've claimed, they'll crawl over your medical records in great detail checking that you disclosed everything on your application. Every small and apparently insignificant detail will be subject to intense scrutiny. The problem is that their reams of correspondence can be quite upsetting for you.
The insurers defend their procedures saying that they need to be certain that when they accepted the business, you disclosed the full truth about the factors affecting your health. They want to be sure that you didn't cheat by omitting some information in order to dupe the company into issuing a policy when they otherwise might not, or to help you qualify for a lower premium. Either way, non-disclosure as they call it, is cheating and a valid reason for them refusing your claim. It doesn't even matter if the information you omitted ultimately had nothing to do with the illness that occasioned the claim. The insurers position is that every piece of information you provide was used to work out your premium and any omission affects the calculation.
The insurers are particularly distrustful if the claim arrives within the policy's first five years. Any claim arising during this period is classed as an “early claim” and the insurers are particularly watchful for policyholders who took out the critical illness insurance already suspecting that that they were already ill.
The problem is that all this intense scrutiny attracts a very bad press. If you're very sick and distressed, the last thing you want is lots' of questions and high-handed hassle from your insurer.
There's undoubtedly a conflict here. If they are to neutralise the bad press, the insurance companies need to work much harder at softening the enquiry process and they must liase much more closely with their claimants. Insurers must present a much softer centre at what is a most distressing time for their claimants.
All this adverse PR has had two effects on the critical illness insurance market. Applicants have apparently been favouring insurers who publish the lowest rejection rates and others have withdrawn from making any application.
In practice, avoiding insurers who publish high refusal rates has little benefit. That's because the published figures can be misleading. The latest figures show that Scottish Equitable Protect has refused to pay out on 28% of critical illness claims followed closely by Friends Provident at 25%. If you compare these figures with Scottish Provident at 13.7%, many potential policyholders can be forgiven for favouring Scottish Provident. But that's not necessarily the best decision.
The problem with interpreting these figures is that the figures themselves can be distorted by how long the insurer has been active in the critical illness market. As rejection rates are highest with policies that have only run for a few years, then companies that are new to the critical illness market will automatically have the highest rejection rates. This leaves companies such as Guardian Financial Services looking good with a rejection rate of just 10%. The truth is that the Guardian has been in the market for over 15 years and has a mature book of business.
And it's a pity that all this negative publicity has undermined confidence in critical illness insurance. In our view, this insurance plays an important part in protecting family finances but people are being deterred from buying it, leaving their family unit exposed if they become seriously ill. After all, if the main income provider is taken seriously ill, the family's income can plummet. That means that the tax-free lump sum paid out by these policies can become central to the family's financial survival.
Our advice is if you think you need critical illness cover press on. But be aware that these policies vary a lot in the cover they offer - so straight price comparisons aren't really meaningful. Basic plans will cover one or more of the most serious conditions but comprehensive plans cover many more – for example:
Alzheimer's disease
Aorta graft surgery
Aplastic anaemia
Bacterial Meningitis
Benign brain tumour
Blindness
Cancer
Cardiomyopathy
Chronic lung disease
Coma
Coronary artery by-pass surgery
Creutzfeldt-Jakob disease
Deafness
Dementia
Heart attack
Heart valve replacement or repair
HIV or AIDs from an assault, blood transfusion, occupational duties or accident
Keyhole heart surgery
Kidney failure
Loss of independent existence
Loss of limbs
Loss of speech
Major organ transplant
Motor Neurone disease
Multiple Sclerosis
Paralysis/Paraplegia
Parkinson's disease
Progressive Supranulcear Palsy
Stroke
Third degree burns
Total and Permanent Disability
Cover for children
This complexity means that you really need independent advice. There are plenty of web sites that can help you. Just search for “critical illness insurance” and make sure you can talk to an adviser before you buy.
Digg
del.icio.us
Blink
Stumble
Spurl
Reddit
Netscape
Furl
Article keywords: critical, illness, non, disclosure
Article Source: http://www.articles2k.com
Brokers Online offer online access to Critical Illness, Life Insurance and health insurance online
|
|
| Top Insurance Articles |
- 1). Growing Old By : Joseph Kenny
There are a couple of things in life that we know, at some stage, we will be worried about. Growing old certainly seems to be one of them. More and more, our culture is becoming obsessed by the cult of youth. Not only are film stars and musicians young and beautiful, but increasingly, politicians and newsreaders are getting younger also. Add to this.
|
- 2). Health Care Eligibility For Unauthorized Migrants - Moral & Practical Implications By : Erin Shaughnessy
Various organizations and government officials have cited estimates for the number of illegal immigrants at between eight and twenty million. With rising health care costs as a major issue for most Americans, this article considers the moral and practical issues of providing medical care for uninsured immigrants.
According to a research report entitled “The Size and Characteristics of the Unauthorized Migrant Population in the U.
|
- 3). Determining How Much Life Insurance You Need By : Stephen L. Nelson, CPA
When considering life insurance, you’re planning and preparing for an event most of us would rather not think about. But life insurance represents a critical step in managing your personal finances and ensuring your family’s well-being.
The Two Approaches to Life Insurance
You can use one of two approaches to estimate how much life insurance you should buy: the needs approach or the replacement-income approach.
|
- 4). Can Car Insurance Be Affected By Your Bad Credit History? By : Joseph Kenny
If you have bad credit you can be denied car insurance! The protections afforded to the consumer since the Depression of 1929 no longer exist. The Financial Laws passed through Congress in 1992 allowed banks, insurance companies, investment firms to handle banking, insurance and investment operations. Laws passed after 1929 had prevented banks from.
|
- 5). How to Get Cheap Auto Insurance on the Internet By : Heather Colman
If you have a connection to the Internet and a computer you can easily find cheap auto insurance. With more and more businesses turning to the Internet to service their customers and increase sales, it's no wonder you see an insurance man on every virtual corner.
Not only are most of the major companies online today they now provide insurance quotes and the ability to buy your policy right from their websites.
|
- 6). Gap Insurance: A Financial Safety Belt By : Peter Garant
Why is gap insurance considered as a financial safety belt? Simply put, it keeps you from being financially ruined when disaster hits your car. For example you are in this situation, you bought a late-model car three months ago using a car loan with a regular car insurance. The car costs $30,000 and you have already made three payments of $900 each month.
|
- 7). Eight Rules for Saving Money When You Buy Insurance By : Stephen L. Nelson, CPA
By following the eight rules explained here, you can save money, and just as important, you can save yourself from making serious mistakes when you shop for and acquire insurance policies.
Rule 1: Buy Insurance Only for Financial Risks You Can’t Afford to Bear on Your Own
The purpose of insurance is to cover catastrophes that would devastate you or your family.
|
- 8). Critical Illness Insurance The Non-Disclosure Problem By : Michael Challiner
If you're in the unfortunate position of having to make a claim on your critical illness insurance policy, the last thing you want is insensitive hassle or apparent non co-operation from your insurer. But according to numerous newspaper articles, that's precisely what's happening. The core problem is that before they'll pay out, the insurer will always want to make exhaustive enquiries about your past health record.
|
- 9). Pssst - Want To Know A Secret That Banks & Car Insurance Companies Don't Share With You By : Tom OLeary
Every single driver in the U.S. is required to have Car Insurance. And most of drive around confident that we have adequate coverage to protect us should we ever be involved in an accident.
Yet, almost 97% of all drivers are not adequately protected...and don't even know it. Here's what I mean.
Let's say you're involved in an accident and it's serious enough that the car is considered a "total loss" by your Insurance Company.
|
- 10). Life Insurance & Why It’s Important For Your Family By : Daphne Succes
It’s sad to think about, but life insurance is something that everyone needs to consider. In the event of an unfortunate loss, an individual often wants to have the peace of mind in knowing that his/her family will be financially secure.
Life insurance can be obtained in a number of ways, including from a national insurance provider, various credit cards and/or certain employers.
|
| New Insurance Articles |
|
|
|
|
|
|
|
|
|
|
- 6). When To Consider Selling Your Life Insurance Policy? By : Paul Sherman
A Life Insurance Policy is a personal property, like a house, car, antiques, old painting or stocks and bonds. You can sell your life insurance policy like you sell your other personal property items. Life insurance may now be viewed as a traditional asset that can be purchased or sold. Sale of Life insurance policy is called as Life insurance settlement, Life settlement or Senior settlement.
|
- 7). Life Insurance, A Great Investment Opportunity By : Mika Hamilton
Insurance is often the safe and most risk free approach to investment. Most people think they are sufficiently insured when they are not. Hardworking people spend a lifetime earning what they have. Our personal wealth is a coupling of family and our income early potential.
|
- 8). All About Home Insurance Leads By : Oliver Turner
After loads of man-made and natural calamities in USA the Home Insurance market has come much into prominence. And at present the competition is at its peak.
Homeowners Insurance is a guarantee, which pays the cost of your house if it gets damaged in some natural or manmade disasters like fire, floods, storms etc.
To get a good home insurance quote we often turn to agents.
|
- 9). Health insurance plans By : Janani
Health Insurance:
Health insurance, which is coverage for individuals to protect them against medical costs and give them a surity to a secured life in this unsecured world with day to day accidents, enormous infections and diseases which may be highly fatal such as Tuberculosis and other viral infections, Genetic disorders that requires relatively high costs for treatment and diagnosis.
|
- 10). Life Insurance Online By : Robert Lawrence
There are many types of life insurance policies. Before you venture out for one, learn about them and see which one is applicable to your needs best. The following are the most common ones:
1. Term life insurance: This type of insurance is the most basic of all. Its one and only function is to cover your life with an amount of cash which on even of your death will be given to your nominee.
|
|
|
