Insurers Enhance Protection Insurance
Most experiencedlqualified advisors would agreethat Financial Protection Insurance is fundamental to the majority of families, whether it may be a safeguard in the event of prolonged illness, premature death, cover for an accident or loss of employment (especially in the present economic climate),.
Life Insurance is the foundation of all financial assurance to ensure a lump sum that is not taxable, in the event of a death or for cover for a mortgage. Regrettably, a percentage of other Protection Insurance policies, do not have the samedo not have similar} reputable qualities and have been branded as being miss-sold. furthermore, based on what we are now aware, critical illness cover has suffered due to incredible exclusions from insurance policies making it possible for insurance companies to reject a claim even if it is genuine.
However, a little faith was reinstated when Norwich Union reported on the conclusion of claims on Critical Illness Insurance policies on their half yearly accounts.
Critical Illness Insurance claims were being rejected because clients did not reveal their complete health history. As a result Legal and General says that in the last seven months the amount of refused claims has fallen significantly from 6.8% in the last year, to 1.5%.
Why? We believe, not only Standard Life but all insurers, because of harmful publicity, have been placed in a position whereby they must diminish the amount of claims that are rejected. Does this show how powerful the press can be? Debateable perhaps – you may think we are sceptical but we believe there are other factors that encouraged the insurance companies to make modifications. Lately, as a result of |bad press|dire media}, sales of Critical Illness Cover have fallen which in turn has noticeably impinged on the insurance company’s profit. This is most likely to have been the vehicle to further change!
Friends Provident, Norwich Union, Scottish Provident and Axa have initiated some important changes expressly designed to reduce their rejection rates. To begin with, they outline plainly that all medical disclosure, however insignificant a visit to a Doctor could have been, must be revealed. Axa, together with others will get a Doctor or Nurse to telephone every applicant to discuss all the details of their medical record. If the insurance policy then goes on risk, some policyholders are being reminded that it is important that they give full health disclosure and they are permitted to add or put right any details on their application document.
The Insurance Company may then re-assess the risk and if it is believed to be increased the monthly premium will likely be increased – which looks more rational and eventually more acceptable than paying the original premium then having a claim rejected because of non-disclosure of medical history.
This action should have been applied by the Insurance Companies a long time ago as the public’s understanding of Protection Insurance has deteriorated by their somewhat strange approach. Without doubt, there is a great need for protection insurance so we can hope that it is able to restore faith and then the popularity it justly warrants.