A small number of people are covered against severe illnesses even though it may appear at anytime. Unum Provident, the income protection provider, has carried out investigations that reveals only 5.2% of the country’s work force own critical illness cover, even though they will receive a lump sum if they have a stroke, heart attack or suffer from cancer.
16% of the population think the insurance to be too costly, the survey reveals, which explains the low take up.
Potential clients are also puzzled by the phrasing of policies and the disparity between constant health insurance and critical illness insurance.
A working party put together by the Association of British Insurers, is at this time re-examining the phraseology of policies. The situation could turn out to be even more perplexing if the operational party choose to decrease the amount of conditions defined as a critical illness.
Standard Life have introduced a new product called Elixia 123, which it declares reduces the cost of critical illness cover by around 29 per cent and on occasions by as much as 52 per cent.
This will be attained by letting clients to pick the illnesses for which they require cover. There are 3 categories of risk. Group one. Heart attacks, strokes and invasive cancer. The life insurance will only make a settlement if the condition leads to major life style changes or is life threatening.
Category two. Conditions that do not have so much impact on life expectancy but do significantly affect life style. Motor neurone disease, blindness and Alzheimer’s are included in this category.
Group 3. Illnesses that are harrowing but have little effect on life expectation. Life style adjustments may perhaps be involved. This category protects strokes and minor heart attacks, open heart surgery and less serious types of cancer.
You can choose a mix of categories and your cost is evaluated accordingly. If you can not meet the expense of all of the categories you can simply select category 1 to cover you for life threatening events. You could then ge a 100 per cent settlement if you are diagnosed with a group one event and nothing in categories two and three.
Maybe you are more apprehensive about prolonged disability, in which case you might decide on a full payment under category two and a lesser percentage for one and three. Customers who desire comprehensive cover can pick the full 100 per cent benefit no matter which group their illness is featured in.
Some people may not understand Critical illness cover is not that expensive so it is prudent to opt for a comprehensive insurance, which will give you peace of mind.
Jennifer Green, the distribution development manager at PruHealth, is concerned about how the jargon is explained. She emphasises that consumers must understand accurately what they are purchasing. For example, when is an illness defined as major? The 1st and the 3rd categories need explanation before taking insurance as there is not much to choose between them in her view. Problems can occur later if the customer has not fully appreciated the terms of the insurance policy when they Moria Jennings.