Critical Illness  

Protection policies may not pay out after medical changes

Protection policies may not pay out after medical changes

Recent advances in medical data could mean insurance providers may be able to avoid paying out over certain conditions.

According to a review by the Financial Technology Research Centre, which is carried out by a panel of doctors and epidemiologists every six months, medical developments can mean the treatment or diagnosis of some conditions no longer match up with the definitions used by insurers.

For example, the review found that most insurance providers' definitions of a carcinoma in situ of the colon or rectum required a histological report to prove diagnosis.

But recently, The Association of Coloproctology of Great Britain and Ireland stated doctors should no longer use this diagnostic method. Doctors on the FTRC's panel suggested this meant a traditional positive diagnosis — which would fit with the insurers' definition — was therefore impossible.

Similarly, most insurers required a hysterectomy to confirm a diagnosis of a carcinoma in situ of the cervix but the FTRC found this procedure was rarely carried out.

Through its review, the FTRC rates insurers based on how likely they are to pay out based on how their definitions match up with medical data or practices.

In the latest results, 'insurer scores' were adjusted on eight frequently seen conditions — benign brain tumour, carcinoma in situ, low grade prostate cancer, cardiomyopathy, coronary angioplasty, Parkinson's disease and pulmonary hypertension.

While the scores for carcinoma in situ went down, those for other conditions went up.

For example, the score for Parkinson's disease went up. Almost all insurers define Parkinson's disease as a "permanent clinical impairment of motor function" and will pay out if this is proven.

In its latest review, the FTRC found these symptoms became better diagnosable due to medical advances which means insurers are now more likely to pay out, leading to a higher insurer score.

The FTRC said this demonstrated why insurers should constantly review their wordings to reflect the situations they wish to cover.

Insurer scores are available to advisers through the FTRC's Quality Analyser software. The FTRC will match a clients' profile — age, gender, health — with the provider who has the best scores for the conditions the client is most likely to suffer from.

Advisers can then compare a range of protection plans to identify the policies with the most beneficial wordings for clients.

Ian McKenna, founder of Protection Guru and FTRC, said: "With medical science moving at such a fast pace, it is important that our doctors continually review our critical illness analysis to ensure that we can take into account any advances in medical science and new medical data.

"Our latest review has had a significant impact on some insurer scores and highlights the complexity surrounding the critical illness market."

The FTRC evaluates its analysis every six months to ensure it remains relevant to the latest advances in medical science, the latest medical data and current industry practice.