Insurers Enhance Protection Insurance
Written by Author on September 2nd, 2009
Most trained advisors would be of the same opinionthat Protection Insurance is fundamental to a good number of families, either as a precaution in the event of premature death, prolonged illness, loss of employment (especially in the present economic climate), or cover for an accident.
Life Insurance is the basis 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. Unfortunately, a proportion of other Financial Protection Insurance types, do not do not have equivalentdo not have similar} reputable qualities and have been labelled as being miss-sold. Also, based on what we know, critical illness cover has suffered asa result of startling omissions from insurance policies making it feasible for insurance companies to reject many claims, as genuine as they may be.
However, a little faith was restored when Aviva gave details on the conclusion of claims on Critical Illness Insurance policies on their 1/2 yearly figures.
Critical Illness claims were being declined because people did not reveal their complete health record. As a result Standard Life says that in the last 5 months the amount of turned down claims has fallen significantly from 6.7% in the last year, to 2.3 per cent.
Why? We believe, not only Legal and General but all insurance companies, because of negative publicity, have been put into a position whereby they must reduce the number of claims that are rejected. Does this prove how strong the media can be? Debateable perhaps – you may think we are sceptical but we think there are other factors that urged the insurers to make adjustments. A short time ago, as a consequence of |bad press|dire media}, sales of Critical Illness policies have fallen which in turn has noticeably influenced the insurers profit. This is more likely to have been the catalyst to promote change!
Friends Provident, Norwich Union, Scottish Provident and Axa have instigated some major changes expressly created to diminish their rejection rates. Firstly, they silhouette clearly that all health disclosure, however insignificant a visit to a Doctor might have been, must be includedmade known. Axa, among others will get a Doctor or Nurse to telephone every candidate to discuss all the particulars of their medical record. If the insurance policy then goes on risk, a number of policyholders are being told that it is vital that they provide complete medical disclosure and they are permitted to add or correct any details on their application.
The insurer may then re-evaluate the risk and if it is thought to be increased the monthly payments will likely be raised – which looks more reasonable and eventually more satisfactory than paying the original payment then having a claim rejected owing to non-disclosure of medical history.
This action should have been put into operation by the Insurance Companies a long time ago as the public’s perception of Protection Insurance has eroded by their somewhat ‘Off the ball’ approach. On a positive note, there is an obvious and essential need for protection insurance so we can hope that it manages to re-build trust and then the recognition it duly deserves.