Summary
In this article we explain how Financial Protection Insurance may grow to be more popular
with the insurance companies at long last making constructive steps that should hopefully be successful.
Most experienced and qualified financial advisors would agree that Financial Protection Insurance is necessary to a good number of families, whether it may be a precaution in the event of cover for an accident, loss of employment (especially in the present economic climate), prolonged illness or premature death.
Life Insurance policies are the foundation of all financial assurance for cover for a mortgage or to ensure a lump sum that is not taxable, in the eventuality of death. Unhappily, a proportion of other Financial Protection Insurance types, do not have the same reliable qualities and have been labelled as being miss-sold. furthermore, based on what we are now aware, critical illness insurance has suffered owing to astonishing exclusions from insurance policies making it feasible for insurers to reject claims even when they are genuine.
However, a little confidence was re established when Standard Life Cover reported on the conclusion of claims on Critical Illness policies on their 1/2 yearly statistics.
Critical Illness Insurance claims were being declined because customers did not disclose their complete medical history. As a result Norwich Union says that in the last six months the number of refused claims has fallen considerably from 6.8% in the last year, to 1.6%.
Why? We believe, not only Standard Life but all of the insurers, because of harmful public relations, have been placed in a situation whereby they must reduce the number of claims that are rejected. Does this show how forceful the press can be? Debateable perhaps – you may think we are dubious but we think there are other factors that urged the insurers to make adjustments. Lately, as a result of bad press, sales of Critical Illness Cover have declined which in turn has obviously impinged on the insurance company’s profit. This is most likely to have been the vehicle to further change!
Axa, Friends Provident, Norwich Union and Scottish Provident have instigated some prominent alterations expressly designed to reduce their rejection rates. To start with, they silhouette plainly that all health disclosure, however trivial a visit to a Doctor might have been, must be revealed. Scottish Provident, amongst others will get a Doctor or Nurse to phone every candidate to go through all the particulars of their medical history. If the policy then goes on risk, a number of policyholders are being told that it is important that they provide full medical disclosure and they are allowed to add or correct any information on their application.
The Insurance Company may then reconsider the risk and if it is thought to be increased the monthly premium will likely be increased – which looks more reasonable and eventually more satisfactory than paying the original payment then having a claim rejected owing to non-disclosure of medical records.
This process should have been taken by the insurers years ago as the public’s understanding of Protection Insurance has eroded by their somewhat strange approach. On a positive note, there is a clear and necessary need for protection insurance so we can hope that it is able to restore faith and then the esteem it duly deserves.