Summary
Will Protection Insurance become more popular? The Insurance Companies are now taking the right steps. We hope they will be successful. Read this article to find out what is now happening in the insurance market.
Few professional financial advisors wouldn’t disagree that protection insurance cover should be the core of most family’s financial planning whether it be safeguarding against the detriment of premature death, accident, long term illness or (particularly now with the arrival of the credit crunch), cover for unemployment.
Life insurance cover is rightly the bed rock of financial planning whether it be used to cover your mortgage or supply a tax free lump sum for your dependants in the event of your demise. Sadly, some other forms of protection cover have a less desirable status. Payment Protection insurance has a reputation for being miss-sold and critical illness insurance has historically suffered from extensive policy exclusions which permitted the insurers to reject a high number of claims, even if they appear valid.
But last month a glimmer of light appeared when Friends Provident reported its 1st half figures on the resulteffect of claims on its critical illness and life insurance cover. These numbers appear to imply that at last the question of unintended disclosure of health particulars when the policy application is done, is being resolved.
A little while ago critical illnesscover claims were being routinely turned down on the merest hint that the client had left out any slight medical condition – even a sore throat or a foot infection! In line with the figures presented by Friends Provident, their claim rejections have reduced sharply from 6.5% last year to 1.7% in the last six months.
Why is this? Scottish Provident, Scottish Equitable, Axa, Friends Provident, Norwich Union and LV have initiated a collection of amendments calculated to reduce their refusal rates. They begin with an extremely clear explanation of the magnitude of complete medical disclosure right down to when they last saw their Doctor no matter how minor the reason. And some insurers such as Axa get a medically trained person to ring each applicant to discuss their medical history in detail. Then when the insurance cover goes on risk, some insurers are reminding the policyholders of the importance of full health disclosure and allowing them the option of adding or correcting the details on their application.
If the new details are assessed as increasing the insurance companies risk, then the insurance company will inevitably put up the monthly premium – but that is without doubt far better than paying the previous payment for many years and then having a claim refused.
The insurance companies should have taken path a long time ago as their softly, softly attitude has dented the consumer’s assessment of protection insurance. Nonetheless there is an absolute need for protection insurance so let us pray that it gets the reputation its so rightly warrants.
If you want to find the cheapest life cover, we suggest you go online – just search for quotes for cheap life insurance. All the best offers are there!