Insurance Companies Take Positive Steps To Improve Protection Insurance
A lot of professional financial advisors would be of the same opinionthat Financial Protection Insurance is fundamental to a good number of families, whether it may be 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 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 Protection Insurance types, do not have the samedo not have similar} reliable qualities and have been labelled as being miss-sold. Also, based on what we are now aware, critical illness insurance has suffered owing to shocking exclusions from insurance policies making it feasible for insurers to reject a claim even if it is genuine.
However, a little faith was reinstated when Norwich Union gave details on the conclusion of claims on Critical Illness Cover on their half yearly statistics.
Critical Illness Insurance claims were being turned down because customers did not reveal their full medical record. As a result Norwich Union reports that in the last five months the amount of declined claims has fallen significantly from 5.7 per cent in the last year, to 2.3%.
Why? We think, not simply Norwich Union but all insurers, because of destructive publicity, have been put into a situation whereby they must reduce the number of claims that are rejected. Does this prove how influential the media can be? Debateable perhaps – you may think we are dubious but we think there are other factors that encouraged the insurers to make adjustments. Lately, as a consequence of |bad press|dire media}, sales of Critical Illness Cover have declined which in turn has noticeably impinged on the insurers profit. This is more likely to have been the catalyst to promote change!
Friends Provident, Norwich Union, Scottish Provident and Axa have introduced some prominent changes specially designed to decrease their rejection rates. To start with, they outline plainly that all medical disclosure, however insignificant a visit to a Doctor could have been, must be revealed. Axa, amongst others will get a Doctor or Nurse to telephone every candidate to go through all the particulars of their medical history. If the insurance policy then goes on risk, a number of policyholders are being informed that it is vital that they provide full medical disclosure and they are permitted to add or put right any information on their application.
The insurer may then re-evaluate the risk and if it is thought to be increased the monthly payments will most likely be raised – which looks more sensible and ultimately more satisfactory than paying the original premium then having a claim rejected because of non-disclosure of medical records.
This process should have been put into operation by the insurers years ago as the public’s perception of Protection Insurance has deteriorated by their somewhat ‘Off the ball’ 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 recognition it duly deserves.