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Protection in many ways is a promise. A protection policy is an agreement between an insurer and a consumer that so long as consumers are open and honest about their medical history the insurance product should pay out.

So when claims are turned down because of non-disclosure, consumers are left feeling let down and they start pointing the finger. Consumers blame insurers for failing to make it clear what they had to reveal. In recent years insurers have worked hard to make sure consumers are left in no doubt they must reveal all so when they make a claim it will not rejected because of non-disclosure.

Chris McFarlane, head of protection for LV=, said research indicated one of the main reasons why health protection was not more popular was the lack of confidence in a claim being paid.

Mark Jones, head of protection marketing for Friends Provident, agreed that to increase uptake of protection it was vital to improve understanding of the product, the application process and reduce the number of claims rejected due to non-disclosure.

He said: "What we do is we sell promises as an industry. Once people start to lose confidence in the ability to keep that promise then you have nothing worth buying. It is hugely important that consumers can trust the promises we are selling."

Friends Provident has taken a multi-pronged approach to making sure consumers fully disclose all the details necessary to make sure should the worst happen their insurance policy paid out, Mr Jones said.

As well as holding workshops with advisers, Friends Provident has also put together an underwriting guide that details the importance of declaring medical details.

Work had also taken place to make sure there was nothing about the application process that could confuse consumers or trip them up.

Mr Jones said: "We have gone out and asked people what they think the questions on our application forms really mean rather than just going to the person who put the form together and asking them what the questions mean.

"We go to the people who are being asked the questions – the consumers and the advisers – and check they understand what it all means. We were pleasantly surprised in some respects that in the vast majority of cases the questions we were asking were fully understood and there was not the gap that there might have been.

"But there were areas we could improve, where there was a bit of vagueness and people might not have understood what we needed. We were able to change those questions. Everything we do is hopefully moving towards that end goal of nobody having their benefit reduced just because of something done accidentally."

Going to the customer and ascertaining their understanding of the protection policy they were considering purchasing was vital, agreed Gerry Warner, protection development manager of Zurich.

Mr Warner said rather than demand a GP's report every time there was uncertainty about an application Zurich had opted to issue customer questionnaires when clients had not been clear in their responses or had failed to answer a query.

For income protection these questionnaires had managed to cut non-disclosure down by half, he said.

What was key when it came to cutting down non-disclosure was to adapt approaches to different types of clients considering different sorts of policies, Mr Warner added.

He said: "We have always had a relatively low rate of non-disclosure on our critical illness policies. Our total decline rate is about 12 per cent with only 3 per cent of that being non-disclosure and 9 per cent due to the terms of the condition not being met.

"We have put quite a lot of that down to our critical illness guide, which is called Your Guide to Your Cover. It really does take the client through the product and explains all the terminology. That was a major contributory factor in making customers more aware of what they are buying."

It was also vital consumers were made aware if they realised they had not revealed something essential on their application form they should get back in touch with the insurer, Mr Warner said.

Being flexible was vital, he said, so consumers did not feel they had to keep quiet about any mistakes they may have made and hope these would go un-noticed.

He said: "We are in regular communication with our customers. Some customers who buy protection have very little contact with the provider and adviser after the application until they come to make a claim. Our message is that we are here and people should feel free to talk to us."

Roger Edwards, products director for Bright Grey, said it was vital to understand the way advisers work in order to cut down on incidences of non-disclosure.

Insurers should provide training and back up if necessary and give feedback if a particular adviser's submissions contained a greater than expected number of non-disclosures, Mr Edwards said.

He said: "Advisers are in most cases acting as the client's agent and as such they have a responsibility to explain to their clients exactly what their obligations are when it comes to disclosure and also the consequences of non-disclosure.

"Even if the adviser helps the client to fill out an application in his office, perhaps by reading out the questions, he must make sure the client understands what the questions actually mean and that they answer those questions as asked.

"For example does the client understand the smoking question is asking if they smoke at all and that even the odd cigarette counts as smoking and that they should class themselves as a smoker even if they have convinced themselves they are not."

Mr Edwards said he also recommended advisers explain the importance of disclosures and the fact this is a legal contract they are entering into.

He said: "The best thing to do is to be open and honest. Explain that it is an important part of the application process to ensure they get a fair premium, a little like having to provide references to a new employer.

"Unfortunately any declined claims harm the reputation of the industry. But it is important to get clients to understand that disclosure is an important part of the contract rather than a method of avoiding claims later."

LV='s Mr McFarlane said by looking at the way advisers handle protection customers the insurer had opted to launch a combined online and tele-underwriting service in a bid to remove the burden and risk from advisers by accurately capturing clients' details, as well as ensuring clear and comprehensive upfront disclosure.

Mr McFarlane said: "We believe it is important the client understands what is expected of them, so the adviser has a key role to play here, to explain the application process, including the importance of answering the questions asked truthfully.

"If full and accurate information is not given we cannot determine the correct basis on which the policy can be accepted. If non-disclosure is identified, it can affect the amount of benefit we can pay, or it could result in the claim being declined or even cancellation of the policy."

Mr McFarlane said tele-underwriting was introduced as a time-saving service for busy advisers and provided peace of mind that their clients' relevant details would be captured accurately by dedicated, experienced professionals.

He said this in turn significantly reduced the risk of client confusion or misunderstanding when making an application, which was the biggest cause of complication at point of claim.

Mr McFarlane said: "We are focused on supporting advisers who have more on their plate than ever before, whether through saving them valuable time or providing expert support for their clients.

"Our tele-underwriting service can reduce the incidence of non-disclosure which can lead to difficulties when a claim is made."

In March this year, Mr McFarlane said LV= had also announced it would increase commission for IFAs taking its express route.

The express route for LV='s flexible protection plan involves the adviser filling in a few basic details about the client – all online – and submitting them to the insurer. LV='s team of expert UK-based tele-interviewers then call the clients at a time convenient to them and capture medical, health and lifestyle details for the application.

Mr McFarlane said: "This creates an environment which ensures appropriate risk management information is obtained."

Friends Provident's Mr Jones said in some areas of the protection market tele-underwriting was providing an entirely appropriate way of preventing non-disclosure.

He said the insurer had brought in the use of nurses for tele-underwriting on its income protection side.

Mr Jones said: "We can do that because we get better information to underwriters than we would from going out to GPs for their reports.

"If you compare the two there is no material extra cost for the consumer and it speeds the whole process up as well. Nurses get better information on conditions such as stress, which have an impact on income protection.

"For other products though you could do better with a GP's report. It is therefore not a one-size-fits-all solution.

"For some advisers it just does not fit in with the way they work. Some advisers can be very uncomfortable about passing that part of the process across to the industry. They want to keep that part of the relationship with their client but for others it suits them to pass the client across.

"Having the choice out there is important but I would be concerned if the industry all went in one direction. It is all about individual providers determining what the best process is for the markets they are in."

Zurich's Mr Warner said he was looking to pilot tele-underwriting as he had always been a big fan of the concept as it reduced the risk of writing insurance for intermediaries.

He said: "If it is well trained staff having the conversation with the customer then they should be able to drive down at points that otherwise might be a little hazy or might not have been answered very well.

"If the customer is a little bit vague about when they might have had a particular treatment then the interviewer can drive down and ask them to check."

However, he said while tele-underwriting had its strengths it was not a perfect solution. As the tele-underwriter may not call the client straight away, Mr Warner warned the client could go cold on the idea of protection and the intermediary could lose out on business. Also, he said it would not end all inaccuracies on application forms.

Mr Warner said: "For a customer intent on deceiving you, they will still get away with that because we will not be using voice recognition to see if a customer is lying.

"But early indications from other tele-underwriting pilots is that you get better information and that it is a good experience for IFAs.

"The IFA market is split. Those who have used it really like it but there are other advisers who firmly believe it is their duty to take the customer through the application and hold their hand.

"There is also the risk that if a provider does not do it well and show the right amount of sensitivity when carrying out the interview that they could lose the customer for the adviser.

"Tele-underwriting will grow in popularity, especially for the more complex risks. But if you are an IFA and it is a fairly uncomplicated young life, with a relatively low sum assured, you can get more commission by putting the case through the provider's system online."

Mr Warner added the success of tele-underwriting relied on insurers understanding the responsibility advisers arranging protection policies took on.

He said: "My understanding that is if a relevant fact is missed out we can call on the IFA to pay on that claim with their own funds."

Bright Grey's Mr Edwards agreed even with tele-underwriting there was still the risk consumers could fail to reveal details that could affect their protection policy.

He said: "It is still possible for people to non-disclose even if they are interviewed on the telephone. However tele-interviewing should remove most possibilities of innocent and negligent non-disclosure. This is because people asked direct questions over the telephone are more likely to tell the whole truth.

"If they are talking about a particular treatment or drug the interviewer could ask the applicant to go and have a look at the packaging for their drugs. In addition most companies that do tele-underwriting will also send the print-out of the answers for checking and that gives the customer another chance to disclose anything that has been missed."

He said advisers could also be put off tele-underwriting because the process was still in its early days and there were many forms of tele-underwriting often with "horrible jargony names".

Mr Edwards said: "Little T is where the adviser and client complete all except the medical questions, which are done on the telephone or there is Big T where all questions are asked on the telephone.

"We are also seeing Middle T now where there is a bit of both. One danger that exists is the industry demands tele-underwriting without actually saying what the minimum requirement is and that could cause confusion."

Whatever approach individual insurers opted for it was vital the industry demonstrated a culture of fairness, according to Friends Provident's Mr Jones. In July 2007, Friends Provident announced it would give clients the benefit of the doubt and make proportional payments on non-disclosure. Subsequently this became the Association of British Insurer's approach to non-disclosure for its members.

Mr Jones said: "Where things do go wrong having an honest approach and asking if there was anything we could have done to prevent that happening is vital.

"There is a recognition in the industry as a whole that non-disclosure is not good for consumers, advisers or insurers."

Bright Grey's Mr Edwards said protection providers did not want to be perceived to be looking for ways of declining claims.

But he said the reality was it would be unfair to people who had been totally honest or who had taken the trouble to find out the answers to things they were unsure of if the claims of those who had not were paid.

Mr Edwards said: "It may seem to some that turning down the claims of people who have non-disclosed is not treating customers fairly. Actually it is not treating the ones who have disclosed properly fairly if those who don't get away with it.

"Advisers can also draw parallels with other types of cover. For example if you were applying for car insurance and you had a history of speeding you would be expected to tell the company about this, disclosure on a protection product is the same."

Mr Edwards said non-disclosure had to be taken very seriously by all parties involved in arranging insurance because it could have a fundamental effect on the potential outcome of a protection recommendation and the client's finances at a point in their life when cash was much needed.

He said: "When advisers recommend their clients take out protection insurance, the main message is one of peace of mind. The customer benefit is a product that will allow them to maintain their financial lifestyle and independence if faced with illness or the death of an income earner. The peace of mind comes in that their mortgage will be paid off and their income will be replaced if they cannot work due to illness.

"Imagine if after living with that peace of mind for many years, and of course paying the premiums for all that time as well, a claim was turned down through non-disclosure and that the financial peace of mind had been an illusion all along. The family finances are devastated in the same way as they would have been if there had been no policy in the first place."