Nonetheless, Ms Gilchrist says the recent folding of Bright Grey and Scottish Provident into the Royal London brand has aided the firm. She says: “This has enabled us to grow and develop our protection propositions, which has in turn extended our reach with both advisers and customers.
“We improved our online service last year to make life easier for advisers by offering estimated decisions for non-standard cases and the ability to give likely costs for rated cases.”
Zurich has benefitted from a similar upward trend; the 43,602 plans sold last year represent a marked improvement from the 36,105 sold in 2014. Mr Sadler comments: “Over the last couple of years Zurich has made major enhancements to its critical illness. Last year, we paid 95 per cent of protection claims to the value of £224.6m benefitting 2,600 retail customers.”
Claim queries
The data compiled regarding claim rejections largely correlates with the ABI’s findings (see Table 2). Rejections fall into two categories: either due to non-disclosure, or because the condition is not covered under the plan. Of the two, the latter is far more frequent.
Royal London has the lowest number of claims rejected at 7.8 per cent. Of this figure, 6.7 per cent is attributed to conditions not being covered, so therefore only 1.1 per cent to non-disclosure.
One noticeable recent development has been the inclusion of additional illness conditions in a number of firms’ policies. As long as the claim is submitted within a specific time period after diagnosis, which is usually six months, diagnosis of a specific condition will trigger the policy to policy to pay out. Table 4 (overleaf) lists the conditions for the survey respondents and only includes illnesses and diseases that would trigger a full benefit payout.
The ABI lists 23 model conditions that all surveyed providers adhere to, but in practice, most providers offer substantially more.
However, no two offer the same cover. It is important to note that the majority of firms also list a number of additional payment conditions that will pay a partial amount. For example, LV covers accident hospitalisation at the lower figure of £25,000 or 25 per cent of the sum assured.
But Mr Lakey says simply extending the number of illnesses and diseases covered could be counterproductive, and explains: “The more conditions we add, the more difficult it is to explain to a client. And on the other side of the coin, if you don’t explain it you run the risk of the client not understanding and cancelling, thinking that they are covered for something they are not and then maybe going to the Ombudsman.”
