Critical illness insurance problems of disclosure
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Critical illness insurance problems of disclosure
- 1. Critical illness insurance-problems of disclosure?
- 2. Statistics in the last decade state that 1 in 3 people in Britain will be diagnosed with cancer at some stage in their life.
- 3. Although continual ongoing medical research means the chances of survival are higher the threat of suffering from such an illness is still very apparent.
- 4. Almost 55% of claims made on critical illness insurance were cancer based and medics believe this is set to continue.
- 5. In this eventuality critical illness cover can offer the financial security you need.
- 6. However non co-operation from insurance companies seems to be becoming an increasingly common problem.
- 7. Before your insurance company will make a pay out they have to go through vigorous checks on all the information and medical history you supplied.
- 8. Although in your application to make a claim you will have told them this information, insurers will now insist that this is rechecked.
- 9. For example if you state that you were a non-smoker when you made the claim, your insurance provider will need conformation of this from your doctor.
- 10. The main reason for this process is the problem of non-disclosure.
- 11. As the title suggest, non-disclosure is where the insurance company believes the applicant has withheld factual information, whether inadvertently or not.
- 12. Insurers defend this procedure stating that, failure to disclose information when you first applied for the policy may have affected whether or not you would have been initially refused cover.
- 13. Non-disclosure is therefore seen as a way of cheating the system and insurers see this as a valid reason for refusing an insurance claim.
- 14. Additionally insurers are particularly distrustful of those making a claim within the first 5 years of the policy.
- 15. Any claim within this period is seen as an “early claim” and insurers often believe the policy holder took out the insurance with the knowledge they were already ill.
- 16. However this intense scrutiny is now creating the problem of bas press.
- 17. Ultimately even if a piece of information is found that had nothing to do with the illness you claimed for, your claim will still be refused.
- 18. However larger insurance companies are being seen to try and remedy these problems.
- 19. In the last year the insurance giant, Aviva had a “moratorium period”, whereby customers could come forward and present new information they had failed to disclose origionally; without any negative affects on their policy.
- 20. In addition to this major insurance companies advertise regulalry that 85-90% of claims are successful and the payouts the make each year runs into millions and millions of pounds.
- 21. Even if a failure to disclose was inadvertant this may still affect your claim, applicants must therefore insure they don’t withhold anything before going ahead.
- 22. Customers should therefore seek expert independent advice before applying for critical illness insurance.
- 23. Critical illness insurance-problems of disclosure?