Insurers Take Steps To Improve Protection Insurance
Most professional advisors would be of the same opinionthat Financial Protection Insurance is fundamental to most families, either as a precaution in the event of premature death, prolonged illness, loss of employment (especially in the present economic climate), or cover for an accident.
Life Insurance Cover is the foundation of all financial assurance for cover for a mortgage or to ensure a lump sum that is not taxable, in the eventuality of death. Regrettably, a percentage of other Financial Protection Insurance types, do not have the samedo not have similar} sound qualities and have been branded as being miss-sold. Also, based on what we are now aware, critical illness insurance has suffered owing to startling exclusions from policies making it feasible for insurance companies to reject many claims, as genuine as they may be.
In spite of this, some faith was re established when Legal and General reported on the conclusion of claims on Critical Illness Insurance policies on their half yearly accounts.
Critical Illness Insurance claims were being turned down because clients did not reveal their full health history. As a result Standard Life reports that in the last five months the amount of turned down claims has fallen considerably from 6.8% in the last year, to 1.6%.
Why? We think, not only Aviva but all of the insurance companies, because of destructive publicity, have been put into a position whereby they must diminish the amount of claims that are rejected. Does this confirm how influential the press can be? Debateable perhaps – you may think we are dubious but we believe there are other aspects that urged the insurers to make adjustments. A short time ago, as a result of |bad press|dire media}, sales of Critical Illness Insurance policies have dropped which in turn has clearly influenced the insurance company’s profit. This is most likely to have been the vehicle to further change!
Axa, Friends Provident, Norwich Union and Scottish Provident have initiated some important changes specially designed to diminish their rejection rates. To start with, they silhouette clearly that all medical disclosure, however insignificant a visit to a Doctor could have been, must be revealed. Axa, amongst others will get a Doctor or Nurse to telephone every candidate to go through all the particulars of their medical record. If the insurance policy then goes on risk, some policyholders are being told that it is essential that they give complete health disclosure and they are allowed to add or correct any information on their application document.
The insurer may then re-assess the risk and if it is believed to be increased the monthly premium will most likely be increased – which appears more sensible and eventually more acceptable than paying the original premium then having a claim rejected due to non-disclosure of medical history.
These measures should have been put into operation by the insurers years ago as the public’s perception of Protection Insurance has deteriorated by their somewhat ‘Off the ball’ approach. Without doubt, there is a clear and necessary need for protection insurance so we can hope that it is able to reinstate faith and then the esteem it duly merits.