Critical Illness  

Provider warns on false claims in protection applications

Provider warns on false claims in protection applications

Aegon has warned against submitting false information on application forms after it saw an increase in declined life protection claims.

The provider reported an increase in the number of life protection claims it was unable to pay in 2019 due to misrepresentation, particularly around alcohol usage and heart problems.

Simon Jacobs, head of underwriting and claims strategy at Aegon UK cited “significant misrepresentation” on application forms as the reason for the “very small” number of claims it was unable to pay.

Mr Jacobs added that alcohol misrepresentation was one of the most common reasons for many of Aegon’s declined claims.

Figures from the provider showed it declined 3.5 per cent of life protection claims last year, up from 1.8 per cent in 2018.

According to Aegon, 31 per cent of the figure for last year was due to customers not being “completely honest” about their alcohol usage.

It said: “People seem to think that if they tell us they drink more than the NHS recommended amounts, it will affect the cost of their insurance policy. This is incorrect – we usually allow much higher levels before it will affect the cost of your policy”.

Mr Jacobs added: “One of the cases we share… illustrates how a customer didn’t notify us of their 15-year history of heavy drinking and referrals for detox in their application. This particular customer died within 3 months of taking out the policy due to liver changes caused by drinking.

“Our application process clearly asks if you have ever been advised to reduce or stop your alcohol consumption by a doctor, nurse or other medical professional, this includes referral for specialist support such as an alcohol dependence unit or Alcoholics Anonymous. This customer said no.

“We don’t ever want to decline a claim. This should never have been a claim, as had we been aware of the true position, we would have been unable to offer cover to this particular customer.

“An adviser can often help guide people through the application process, to help get the best terms possible, based on the most accurate information.”

Drop in CI claims during lockdown

The provider has also urged those who have a health concern to seek medical advice as soon as possible, after its data showed the number of policyholders claiming on their critical illness (CI) insurance policies had dropped year-on-year during lockdown.

The protection provider found 37 per cent fewer policyholders claimed on their CI policies during May this year, compared with the same month last year. 

Its data also showed that CI claims in April were 17 per cent lower than the same month last year.

Mr Jacobs said: “The impact of lockdown can be clearly seen in the volume of CI claims and it’s worrying. People being mindful of burdening the NHS, might have delayed a GP visit or might have missed early detection due to limited screenings for things like breast and bowel cancer.