The news, as always is slamming life insurance companies under the aspect of critical illness cover. Critical illness and life insurance is not as straightforward as plain old life insurance. The reason why cover and critical illness claims are problematical is because the insurance company needs to validate 3 points before settling the claim. Unlike straightforward life insurance when they can hardly argue that your deceased. These three claims are as follows.
Has the illness been precisely diagnosed?
Is the confirmed illness included in the schedule of insured critical illnesses covered by the policy?
Did the policyholder fully disclose their medical history and current state of health on their original application form?
However, insurance companies have to go through these processes, as annoying as it is for the insured, people do fill out wrong parts of applications, thus, alternating premiums.
So recently, companies have been rising there premiums significantly for cover and critical illness. Not only for this reason, but also due to medical advances within recent years resulting in quicker diagnosis of diseases. This has lead to a massive 70% increase in critical illness and life insurance premiums.
Medical Advances:
Critical illness cover is a good idea for both companies and the insured individuals, as it does simply offer a lump sum upon diagnosis and profits for the company itself. However, as medical advancements have been significantly improving over the last decade, fatal diseases are becoming easier to detect as well as easier to treat, meaning that insurance companies are having to payout earlier on claims that are not necessarily life threatening.
Typical illnesses that are covered include Alzheimer's, blindness, brain tumours, cancer, heart attacks, HIV /AIDS and basically any illness that results in total and permanent disability.
Realization by insurance companies:
Insurance companies have finally began to grasp that people will start to stop purchasing critical illness policies as people wont be able to meet the expenses of them, resulting in both parties losing out. Many companies are considering alternatives, such as Scottish Widows who are thinking of offering consumers the choice of critical illnesses they will want to be covered for with each illness having a specific price.
Whether this method proves popular remains to be discovered in time to come, however, it does sound slightly unreasonable that people have to choose their critical illness life cover diseases. The whole point of insurance to provide a safety net for the unexpected. Also the fact remains, that people will more than likely choose all the common illnesses, thus make everybody's premium related, with the same early diagnosis and treatment which insurance companies will have to pay out. Which after all, is the sole purpose of critical illness and life insurance.
As i'm sure you know, one of the best ways to find quotes for life critical illness would be to browse the web, look out for independent discount brokers who will search the entire internet for you, and get the cheapest price.
Peter Goligher is founder
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