A small number of people are insured against serious illness even though it may appear unexpectedly. Legal and General, the income protection provider, has carried out research that say that only 4.2 per cent of the country’s work force possess critical illness insurance, even though they will get a large sum if they have cancer, a heart attack or suffer a stroke.
18 per cent of the population consider the cover to be too dear, the analysis reveals, which give reasons for the low take up.
Would-be customers are also puzzled by the phraseology of policies and the disparity between constant health insurance and critical illness cover.
A working party put together by the Association of British Insurers, is a present re-evaluating the phrasing of policies. The situation might become even more confusing if the working party choose to decrease the number of illnesses defined as a critical illness.
Standard Life have introduced a new plan called Elixia 123, which it proclaims reduces the price of critical illness cover by around 25 per cent and sometimes by upto 50 per cent.
This will be achieved by permitting clients to select the illnesses for which they want insurance. There are three groups of risk. Category one. Invasive cancer, strokes and heart attacks. The plan will only pay out if the illness leads to major life style changes or is life threatening.
Group two. Conditionsthat dramatically affect life style but do not have much impact on life expectancy. Motor neurone disease, Alzheimer’s and blindness are incorporated in this group.
Group 3. Illnesses that are harrowing but have a modest effect on life expectation. Life style changes may possibly be involved. This group protects minor heart attacks and strokes, less serious types of cancer and open heart surgery.
You can pick a blend of groups and your monthly payment is calculated accordingly. If you are unable to meet the expense of all of the categories you might just select group one to insure you for life threatening events. You could then receive a total settlement if you are diagnosed with a group 1 event and nothing in categories 2 and 3.
Perhaps you are more apprehensive about long termdisability, in which case you might go for a full payment under category two and a lower percentage for one and three. Clients Consumers who desire full insurance can pick the full 100 per cent benefit no matter which category their condition is featured in.
Some people may not understand
Critical illness cover is not that expensive so it is wise to go for a comprehensive plan, which will give you complete protection.
Moria Jennings, the distribution development manager at PruHealth, is concerned about how the terms are defined. She emphasises that consumers must understand exactly what they are buying. Such as, when is a condition defined as major? The first and the third groups need explaining before purchasing cover as there is not much difference between them in her view. Problems can happen later if the customer has not fully comprehended the terms of the insurance policy when they Susan Pilks.