Summary
Tell the whole truth on your application form. Currently one in four of claims are rejected.
Critical Illness Insurance. Critically important - time to take cover
Back in 1999, the Imperial Cancer Research Fund stated that one in every three people in Britain will be diagnosed with cancer at some point in their life. With rapid medical advances the chances of survival from a major illness are improving but the consequences of suffering such an illness continue to be substantial and life-changing.
- Low Cost Life Insurance
- An introduction on how to find and qualify for cheap life insurance
- Life and Critical Illness Insurance Tell the insurers everything when you apply.
- Non-disclosure of relevant information is the single largest reason for the rejection of a life or critical illness insurance claim. This true story points up the complications.
- Critical Illness Insurance. Concerns for Cautious Customers
- The selling of Critical Illness Cover has been under review by the FSA. They are addressing some concerns in their report in an effort to protect the customer.
- Calculating The Life Insurance Cover You Need
- You family will need cash to survive when you've gone. They will also need a monthly income to replace your salary. Follow our guide to calculating the level of life insurance you need.
- Insurance Company's Miracle – You're No Longer Critically Ill
- Critical Illness Cover is changing. People are living longer with once life-threatening conditions. Reviewable policies are becoming more common.
Unfortunately, at a time when most people are suffering from the shock of learning that they have been diagnosed with a critical illness, they and their families may learn some additional disturbing news. The insurance industries latest figures show that, on average, around a quarter of all claims are rejected!
As soon as a claim is made, the insurance company will request a huge amount of information from your doctor. It's quite likely that much of this information is not relevant to the illness for which the claim relates. The insurer is using this information to ascertain whether or not the insured has been completely truthful on the original insurance application form.
The reason for this is what the insurers call non-disclosure and if any medical information has been omitted, they can use this as grounds for refusing the claim.
It appears that the non-disclosure may not be related to the critical illness. Claims have been turned down for various reasons, including the case of a woman with breast cancer whose case was rejected because she hadn't listed treatment for depression on the original proposal form.
The rejection rates* are shown as follows:
Company |
% of rejected claims |
Scottish Equitable Project |
28% |
Norwich Union |
26% |
Friends Provident |
25% |
Legal and General |
22% |
Bupa |
21.5% |
Skandia |
21% |
Prudential |
20% |
Standard Life |
20% |
Scottish Widows |
18% |
Scottish Provident |
11% |
Scottish Equitable Guardian |
10% |
Average |
23.5% |
Despite the insurers claim that these rejections are perfectly legal, the Law Commission appears to think differently. There has been a consultation document published recently and the Commission makes the statement "It is possible for an applicant to act reasonably and honestly and yet still fail to meet the duty of disclosure." The conclusions of these consultations will be reported on as soon as they are available.
It is therefore extremely important that when applying for this very valuable form of insurance, you disclose all previous illnesses. It's probable that if you have to claim, then your medical records will be thoroughly examined and if the insurers consider you omitted medical information, they may "throw out" the request.
Compare companies for the best rates. Read the small print. Spend some considerable time in listing medical conditions. Relax - it may never happen.
* Details sourced from the Daily Mail 07/05