Insurance Companies Improve Protection Insurance September 1, 2009
Most specialist financial advisors would concurthat Financial Protection Insurance is vital to a good number of families, either as a precaution 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 proportion 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 know, critical illness insurance has suffered due to shocking exclusions from policies making it feasible for insurers to reject claims even when they are genuine.
In spite of this, a little faith was re established when Legal and General gave details on the conclusion of claims on Critical Illness Insurance policies on their half yearly figures.
Critical Illness claims were being rejected because clients did not reveal their full medical history. As a result Legal and General reports that in the last 5 months the amount of turned down claims has dropped considerably from 5.7 per cent in the last year, to 1.6%.
Why? We think, not only Aviva but all of the insurers, because of damaging public relations, have been put into a position whereby they must reduce the amount of claims that are rejected. Does this show how powerful the press can be? Debateable perhaps - you may think we are doubtful but we think there are other factors that encouraged the insurers to make modifications. Lately, as a consequence of |bad press|dire media}, sales of Critical Illness policies have fallen which in turn has visibly influenced the insurers profit. This is most likely to have been the vehicle to further change!
Norwich Union, Scottish Provident, Axa and Friends Provident have introduced some important changes expressly created to diminish their rejection rates. Firstly, they outline clearly that all medical disclosure, however minor a visit to a Doctor could have been, must be includedmade known. Scottish Provident, together with others will get a Doctor or Nurse to phone 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 important that they give complete health disclosure and they are permitted to add or correct any details on their application form.
The insurer may then re-evaluate the risk and if it is believed to be increased the monthly premium will most likely be raised – which looks more sensible and ultimately more acceptable than paying the original payment then having a claim rejected because of non-disclosure of medical history.
These measures should have been put into operation by the Insurance Companies years ago as the public’s perception of Protection Insurance has deteriorated by their somewhat eccentric approach. On a positive note, there is a great need for protection insurance so we can hope that it manages to reinstate faith and then the esteem it rightfully merits.