Peter Chadborn, of Advisory firm Plan Money adds: “The increased prevalence of partial payments helps dispel the myth that Insurers try to avoid paying claims. It is also an agreeable concept for clients, who recognise that often it is fair to receive a lesser or earlier payment in certain circumstances.”
VitalityLife Deputy CEO Deepak Jobanputra, continues: “The reality is that covering against surviving a serious illness is more important than covering against just death – and people who survive one illness often go on to have other issues.
“In fact half of all heart attacks in the UK are repeat attacks, which is why cover for multiple conditions is so important. The definitions used is often the best way to determine the quality of the cover and those that pay out upon diagnosis, rather than those requiring treatment are preferable.”
3. Claims are paid
The number of CI claims paid has increased by approximately 10-15 per cent since 2005. Approximately 80 per cent of CI claims were paid then, compared to around 92 per cent today.
Industry developments to prevent innocent and fraudulent non-disclosure have played a huge part in ensuring more claims are paid each year. The transparency involved in issuing claims stats will also have brought greater scrutiny to why claims were being declined.
According to Alan Lakey at CIExpert, just 2 per cent of claims on average are declined today for non-disclosure. “The industry now recognises that declined claims are an issue picked up on by the press and social media. This has helped to focus their thinking,” he notes.
4. Check what it says ‘on the tin’
While severity-based payments have increased viable claims, it is vital that people are aware that not all forms of cancer or every type of stroke are covered, for instance.
Addy Frederick of insurer LV says: “It is essential clients understand whether the conditions covered are meaningful for their situation. For example, a female client may want a CI policy that has great breast cancer or ovarian terms.
“The illnesses covered vary significantly and there are a number of conditions which are not covered, for example if someone has a back injury or breaks their leg and can’t work.”
A spokesperson for Aviva and Friends Life adds: “It’s important that customers understand critical illness insurance only covers those illnesses defined under the policy terms and conditions. The product does not cover every illness that may be medically regarded as critical.
“It’s also important to understand there are specific definitions for those listed conditions and these need to be satisfied in order for a claim to be paid. For example, some early cancers are not covered.”
