I said recently that more needs to be done to address the number of critical illness claims that are being rejected.
I was commenting following the publication of Scottish Provident's latest claims stats. But in the interests of balance I should say that I didn't mean to imply that Scottish Provident (at 7%) stood out from the crowd.
Scottish Widows do - at 13%!
Thats the figure for 2011 according a recent article by John Fitzsimons called Make A Successful Claim On Your Critical Illness Insurance'. Apparently that figure represents as 30% increase on the percentage of claims rejected by Scottish Widows the previous year!
This figure should cause everyone concern and definately requires further investigation. Don't forget that what we are talking about here is a bankassurance critical illness plan. This means that for millions of customers of the banking group a Scottish Widows critical illness plan will effectively have been the only choice offered to them.
If you have a Scottish Widows critical illness plan maybe its time to start asking some questions.
Thursday 30 August 2012
Friday 24 August 2012
Diabetes? Tips On How To Apply For Life Insurance
Yes, you do have choices about how you apply for life insurance and if you have diabetes making the wrong ones could cost you.
So here are the tips
1) Fully Disclose All Medical Information - cutting corners or forgetting to mention medical information risks making your cover invalid, but if you fully disclose all information you will have peace of mind knowing that the cover is valid.
2) Applying Direct To A Life Insurance Company Has Downsides - There is nothing wrong in applying direct its just that in doing so there's a very good chance that you will end up paying more than you need to because there's will be a good chance that another life insurance company would have charged a cheaper premium. In fact if you already applied direct to a life company and have an existing policy you should still read the tips below and consider getting a second opinion. It wont cost you anything but could save you lots.
3) Research Is Important - Good research will pay dividends and can save you a small fortune. Unfortunately its not easy to do this yourself.
4) Use An Expert - Some companies specialise in offering a service for people with pre existing health conditions such as diabetes, providing a more expert service to help find you best deal www.moneysworth.co.uk are one such company who individually research every single case and provide this service on a non fee basis so they are able to provide you with an indication of likely premium before you apply. An expert will also be able to provide you with information about what other associated types of insurance cover might be available, such as critical illness or income protection.
5) Most Advisers Do Not Specialise In Diabetes - If they dont really specialise its unlikely that they will be able to perform the research to the same standard as a real specialist.
6) How to Spot A Non Specialist - There are a number of ways. 1) Check the website -if the company is genuinely offering a specialist service this should be clear visible on the webite. 2) When speaking on the phone are they asking you the right kinds of questions about your diabetes, do they sound like they are dealing in this day in day out? 3) Sometimes companies pretend to be expert, they tend to rush to the application stage before doing any research - If they quote a preium straight away its probably not a good sign. If in doubt a good questions to ask is what percentage of their clients have diabetes.
7) Think About The Future As Well As The Present - If you develop further complications or additional health conditions in the future you may find it more difficult to obtain cover in the future. As a diabetic if you develop cardio vascular disease in the future, as things currently stand in the market, you will not be able to obtain new life insurance from any mainstream insurer.
8) Guaranteed Premium Rates Are Best - This means that the premiums cannot be increased in the future so you know where you stand so make sure that your premiums are not reviewable.
9) Remember That Once Your Policy Starts Your Insurance Is Guaranteed - Once your policy begins future health changes will not effect your cover or your premiums, which means you no longer have to worry about what the future may bring.
10) Prices for New Policies Will Go Up At The End Of The Year - This is true, especially so for females. If you have diabetes the process time from start to finish for life insurnace normally takes weeks rather than days. You can avoid the price hike by getting your cover in place before the changes take place - that probably means getting on with things now
If you would like a quote or would like to speak to an expert visit www.moneysworth.co.uk or call us on 0845 430 5200
Thursday 23 August 2012
Some Thoughts On Scottish Provident's Latest Critical Illness Claims Stats
The latest Scottish Provident set of claims statistics make for some interesting reading - there are both positive and negative points.
The £43 million in claims paid in the first half of the year is not an insignificant sum and the total now stands at over £1 Billion in critical ilness payouts since 1996. Thats a huge sum of money which will have benefited alarge number of people in their hour of need and proves what a valuable social function life companies perform.
Reading the more detailed report information provides a valuable insight., for example the average period from start to claim is 9 years and the average age at claim is 49.
The critical illnesses producing the highest amount of claims are Cancer 60%, Heart Attack 16% and Stroke 6% and the report further breaks down the cancer claims showing the biggest claim areas as breast 34%, bowel/colon 11%. malignant melanoma and prostrate both at 7%.
But..... the report shows that 7% of claims were not paid and this remains a concern. The two reasons given are a) material non discloure at the point of application and b) not meeting plan definitions and the report provides some examples of each.
Non-Disclosure - There will always be a small number of applicants who deliberately withold relevant medical information and if they are intent upon doing so there then this is their responsibility alone and this is a point which should be acknowledged by those who are critical of the life insurance companies.
However we need to ask ourselves whether as an industry we are really doing all we can to try and avoid 'non deliberate' non disclosure. Furthermore we would do well to consider whether this is always a point of sale issue. It is a fair question to ask how much non disclosure might be resulting from the fast track underwriting process itself. Are we sure that the right messages are being sent out if we are asking only a limited number of questions or where we are asking questions which refer to certain health events only within the last five years?
Interestingly a significant percentage of clients with pre existing health conditions express to us their preference for an underwriting process which includes the obtaining of medical evidence from their GP. They feel that this might cover anything they accidentally failed to remember.
What really would be of value would be to see insurance companies publishing comparisons between the rates of non disclosure applying to cases underwritten 1) without and 2) with further medical evidence.
Not Meeting Claims Definitions - This remains a thorn in the side of the life industry and we need to consider whether there is not room for improvement in how this issue is being dealt with. What we have at the moment is a stand off between the life insurance industry who claim that they are comitted to paying all 'valid' claims and those who claim that the industry deliberately rejects some claims that should be 'valid'.
But in a standoff not much progress is made.
What needs to happen is for both sides to sit down with each other and work together. The long term prospects for the sales of critical illness and other socially valuable protection policies would benefit considerably from involving the consumer in the design, decision making and marketing process. The same applies to a number of other issues currently affecting the life insurance industry (eg STIP, simplified products, activities of daily living, consumer education).
There is a fear among many consumers of non payment at claim. This fear is sufficient to stop some from buying and for some it provides a convenient excuse not to buy. But even among many of those who do buy there remains a nagging doubt that the insurance they have purchased will turn out to be 'invalid'.
A great deal more needs to be done to research this problem.
The £43 million in claims paid in the first half of the year is not an insignificant sum and the total now stands at over £1 Billion in critical ilness payouts since 1996. Thats a huge sum of money which will have benefited alarge number of people in their hour of need and proves what a valuable social function life companies perform.
Reading the more detailed report information provides a valuable insight., for example the average period from start to claim is 9 years and the average age at claim is 49.
The critical illnesses producing the highest amount of claims are Cancer 60%, Heart Attack 16% and Stroke 6% and the report further breaks down the cancer claims showing the biggest claim areas as breast 34%, bowel/colon 11%. malignant melanoma and prostrate both at 7%.
But..... the report shows that 7% of claims were not paid and this remains a concern. The two reasons given are a) material non discloure at the point of application and b) not meeting plan definitions and the report provides some examples of each.
Non-Disclosure - There will always be a small number of applicants who deliberately withold relevant medical information and if they are intent upon doing so there then this is their responsibility alone and this is a point which should be acknowledged by those who are critical of the life insurance companies.
However we need to ask ourselves whether as an industry we are really doing all we can to try and avoid 'non deliberate' non disclosure. Furthermore we would do well to consider whether this is always a point of sale issue. It is a fair question to ask how much non disclosure might be resulting from the fast track underwriting process itself. Are we sure that the right messages are being sent out if we are asking only a limited number of questions or where we are asking questions which refer to certain health events only within the last five years?
Interestingly a significant percentage of clients with pre existing health conditions express to us their preference for an underwriting process which includes the obtaining of medical evidence from their GP. They feel that this might cover anything they accidentally failed to remember.
What really would be of value would be to see insurance companies publishing comparisons between the rates of non disclosure applying to cases underwritten 1) without and 2) with further medical evidence.
Not Meeting Claims Definitions - This remains a thorn in the side of the life industry and we need to consider whether there is not room for improvement in how this issue is being dealt with. What we have at the moment is a stand off between the life insurance industry who claim that they are comitted to paying all 'valid' claims and those who claim that the industry deliberately rejects some claims that should be 'valid'.
But in a standoff not much progress is made.
What needs to happen is for both sides to sit down with each other and work together. The long term prospects for the sales of critical illness and other socially valuable protection policies would benefit considerably from involving the consumer in the design, decision making and marketing process. The same applies to a number of other issues currently affecting the life insurance industry (eg STIP, simplified products, activities of daily living, consumer education).
There is a fear among many consumers of non payment at claim. This fear is sufficient to stop some from buying and for some it provides a convenient excuse not to buy. But even among many of those who do buy there remains a nagging doubt that the insurance they have purchased will turn out to be 'invalid'.
A great deal more needs to be done to research this problem.
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