|
A major UK insurer has admitted that when it comes to insurance claims on critical illness policies a large number of claims end up being turned down. According to Norwich Union nearly twenty five percent of claims were turned down on critical illness cover in 2005. However, the Law Commission is now looking into the situation, and is planning to reduce insurers’ ability to turn down claims on critical illness cover plans.
According to Norwich Union fourteen hundred and fifty eight claims were made on its critical illness insurance cover in 2005, but out of these three hundred and thirty five were turned down. In many cases, this was reportedly because the policyholder had failed to provide vital information relating to their lifestyle or their medical history/health when taking out the policy. Around eighty million pounds was paid out on those policies that were successful.
However, the reason given for many of the cases that were unsuccessful – that important information was not provided to the insurer at the time of the policy being taken out – has come under fire, with many saying that the information that insurers state was not provided actually has nothing to do with the illness that is being claimed for in many instances.
A move is being made by the Law Commission that would stop insurers from penalizing claimants for non-disclosure of information if three years has passed from the date that the policy was taken. Kevin Carr, senior technical advisor for protection broker Lifesearch, said: 'I am in favour of having a period of time built into policies after which you can't be turned down on an innocent non-disclosure. The problem may come because insurers would want to do a lot more underwriting of individuals before they issue a policy, and that costs.'
Tom Smith
04.02.07
More Information:
- Life Insurance - Life insurance or life assurance as many likes to put it is the simplest type of cover or insurance policy available in the market. You can get a life insurance policy made to cover yourself and your family against the various uncertainties of life and the unforeseen future.
- Life Insurance and your Home Mortgage - When a loved one dies, it is upsetting to everyone involved - friends and family members. But what could be more upsetting to the spouse or children is the financial strain some deaths can leave behind.
- Insurance for the Critically Ill - Many people unfortunately become ill at some point in their life with a sickness that turns critical and need constant treatment on a daily basis. Life insurance is a popular product but it is actually more likely that an individual will contract a “critical illness” than die
- Do You Have Enough Life Insurance? - Besides the thousands of people who do not have life insurance, many that do are actually underinsured. Many have children or family members that rely on them financially, and don’t realize their coverage is less than ideal.
|
