A lot of trained advisors would concurthat Financial Protection Insurance is crutial to most 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 Policies 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 policies, do not do not have equivalentdo not have similar} sound qualities and have been branded as being miss-sold. Also, based on what we are now aware, critical illness insurance has suffered owing to incredible exclusions from insurance policies making it feasible for insurance companies to reject many claims, as genuine as they may be.
In spite of this, some confidence was re established when Standard Life reported on the conclusion of claims on Critical Illness Cover on their half yearly statistics.
Critical Illness Insurance claims were being refused because people did not make known their complete health record. As a result Norwich Union reports that in the last 7 months the amount of refused claims has plunged substantially from 6.7 per cent in the previous year, to 1.6%.
Why? We think, not only Norwich Union but all of the insurance companies, because of destructive publicity, have been placed in a situation whereby they must reduce the number of claims that are rejected. Does this confirm 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 changes. Lately, as a result of |bad press|dire media}, sales of Critical Illness policies have fallen which in turn has clearly affected the insurers profit. This is most likely to have been the vehicle to further change!
Axa, Friends Provident, Norwich Union and Scottish Provident have initiated some important changes specifically designed to decrease their rejection rates. Firstly, they outline plainly that all medical disclosure, however insignificant a visit to a Doctor could have been, must be includedmade known. Friends Provident, amongst others will get a Doctor or Nurse to phone every candidate to go through all the details of their medical history. If the policy then goes on risk, a number of policyholders are being told that it is vital that they provide full medical disclosure and they are permitted to add or put right any details on their application form.
The insurer may then reconsider the risk and if it is thought to be increased the monthly payments will likely be raised – which seems more sensible and ultimately more appropriate than paying the original premium then having a claim rejected because of non-disclosure of medical records.
These measures should have been put into operation by the insurers years ago as the public’s concept of Protection Insurance has eroded by their somewhat strange approach. Without doubt, there is an obvious and essential need for protection insurance so we can hope that it is able to restore faith and then the popularity it justly warrants.