Protection Insurance – Insurers Coming Clean
Summary
Life Insurance Quotes could become much more accepted. The Insurance Companies are now taking the right steps. We hope that they are successful. This article gives a clear explanation.
Not Many professional financial advisers would’nt disagree that protection insurance should be the foundation of most family’s financial planning whether it’s guarding against the consequences of early death, long term illness, accident or (particularly now with the arrival of the credit crunch) cover for unemployment.
Life insurance cover is rightly the root of financial preparation whether it be put in place to cover your mortgage or give a tax free lump sum for your family in the event of your demise. Unhappily, some other kinds of protection cover have a less desirable reputation. Payment Protection insurance has a name for being miss-sold and critical illness cover has in the past suffered from widespread policy exclusions which enabled the insurers to refuse an extremely large amount of claims, even if they appear genuine.
But last week a gleam of light transpired when Scottish Provident revealed its 1st half figures on the outcome of claims on its critical illness cover. These numbers appear to indicate that at last the question of unintentional disclosure of medical details when the policy application is done, is being resolved.
Only a few years ago critical illness cover claims were being routinely rejected on the merest suggestion that the client had omitted any minor health detail – even a sore throat or a foot infection! According to the figures reported by Standard Life, their claim rejections have reduced sharply from 6.7 per cent the previous year to 1.7 per cent in the previous 6 months.
Why has this happened? In our view, all insurers, and not just Standard Life Cover, have been made by years of bad media into taking action to reduce the amount of claim refusals. Does this prove the force of the pen? Well yes it’s possible. Think us cynical if you want, but we don’t reckon that the bad media alone influenced the insurance companies that things needed changing. In the past few years, sales of critical illness policies have been deteriorating as a side-effect of the bad media and this has damaged the insurers’ takings. At the end of the day it was power of profit that shaped the background for change!
Life Insurance Companies like Friends Provident, Axa, Scottish Provident, Scottish Equitable,LV and Norwich Union have initiated a range of adjustments intended to diminish their rejection rates. They begin with an extremely obvious explanation of the magnitude of complete medical revelation right down to when they last saw their Doctor no matter how minor the cause. And some insurance companies such as Friends Provident get a medically trained person to telephone each applicant to talk through their health history in more detail. Then when the insurance cover goes on risk, some companies are reminding the policyholders of the necessity of full health disclosure and giving them the chance of correcting or adding the information on their submission.
If the new details are assessed as increasing the insurance companies risk, then the insurer will inevitably increase the monthly payment – but that is definitely far better than paying the original premium for years and years and then getting a claim rejected.
The insurers should have taken path years ago as their softly, softly approach has damaged the consumer’s assessment of protection cover. Nonetheless there is an absoluteneed for protection cover so let us hope that it achieves the reputation its so rightly warrants.
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