I'm afraid we've taken you off the critical list
Specialist health policies may not protect against some serious illnesses.
Wednesday 08 May 1996
Legal and General reports that since it recently cut the cost of life cover by 25 per cent, it has found many of its policy-holders, rather than pocketing the difference, are reinvesting the saving in critical illness cover. Others are buying this cover willy-nilly as part of their compulsory mortgage protection package.
For those buying this kind of cover, however, here are some words of warning: more than one in five critical illness insurance claims are rejected.
As the insurance industry gears up to sell even more cover against life- threatening conditions, not least as part of a mortgage protection packages, many claimants are destined to be disappointed.
The moral is, read the small print before you buy and make sure what illnesses are covered, and that are not. Are you covered not just for cancer, heart attacks and strokes, but for Aids or CJD, for example? And make sure you disclose the full truth, or your policy could be useless.
A survey by Employers Reassurance International, which reinsures most of the major household names including Abbey Life, General Accident, Legal and General and Norwich Union, shows that 75 per cent of claims made for permanent and total disability are disallowed. Over half of those that claim because they are paralysed are denied, nearly half of those claiming for renal failure don't get paid and a quarter of those who claim for a heart attacks, strokes or multiple sclerosis are denied their claim.
While cancer claims make up half of all critical illness claims, however, only 11 per cent are denied.
The most important single reason for not paying out on a claim is failure to disclose either an existing condition or related illness at the time the policy was taken out.
Over half are denied because of misdiagnosis which includes everything from frivolous claims where a man with a broken leg claims for permanent disability, to those who claim for benign tumours when only malignant cancers are covered. There are also the downright fraudulent claims. As the report states: "Our own experience suggests that the temptation of submitting fraudulent claims remains higher than for other life products."
For the insurance industry, there is the worrying fact that over 10 per cent of all claims come within three months of the policy coming into effect.
Phil Cleverley, underwriting manager with Employers Re, says: "Our research shows that one-third of claims are made within a year of taking out a critical illness policy - which shows that there is what we call in the industry some anti-selection going on against the insurance companies involved. Some people just take the attitude that they should try their luck, that they have nothing to lose.
"We are advising the companies we reinsure to be very careful about these policies. Of course, there are also many who do not understand the small print of these policies, the exclusions and the very tight definitions."
One of the most contentious areas is permanent and total disability. While most feel that if they can no longer do their job then they should be able to claim, many policies state that if the claimant can do any job, they are disqualified. Employers Re, which does rolling research into critical illness claims, feels that there has been very little difference over the past 12 months in the percentage of these claims being denied.
Grant Barron, personal market manager with Norwich Union says: "There is a lot of confusion about what is permanent and total disability. We have one on at the moment where someone who has developed a cataract in one eye, which can be easily operated on, is claiming for total loss of sight. A quarter of the claims we get go no further than our replying and spelling out what is or isn't covered.
"We are here to pay out, and the public will never get unless it asks. This a very new market and these misunderstandings are very much an early- days problem."
In fact, many feel that the high level of rejected claims are just part of the teething process of a growing market and, as insurance companies make their wording clearer and the general public understands better what life-threatening cover is all about, so the number of claims declined will go down. While losing a kidney is very serious, it doesn't stop the individual living and working his or her normal life span. Angina may be heart-related, but it is not the same as a life-diminishing heart attack.
Abbey Life, which leads the market in critical illness policies, has paid out pounds 28m in claims, two-thirds of the industry total. Its figures show that 86 per cent of the claims paid come from heart attacks, cancer and strokes. A typical pay-out was for a computer operator who developed testicular cancer. Although he has since recovered, his benefit was pounds 53,537. A female aged 33 suffering from malignant melanoma cancer, although now fully recovered, received pounds 54,000.
Each year, 250,000 are diagnosed as having cancer, 300,000 have a heart attack and 100,000 suffer a stroke. Small wonder then that demand for this kind of cover is on the increase.
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
Buying property overseas? Check out these hotspots
Bargain Hunter: Exclusive discount on a SmartGlider - a self-balancing electric scooter
My Tinder date asked for a refund when I declined a second meet up
10 tips for taking out a personal loan
Number of parents moving to their desired school catchment area is increasing, according to Santander research
- 1 Huawei Mate S and Huawei Watch: new products take on iPhone 6 Plus and Apple Watch
- 2 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
- 3 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
- 4 Senior British politicians tell David Cameron: When dead children are being washed up on beaches, it's time to act
- 5 Make your voice heard: Sign The Independent's petition to welcome refugees
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Senior British politicians tell David Cameron: When dead children are being washed up on beaches, it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...
Day In a Page
The terraces of this two-bedroom penthouse apartment offer panoramic views that stretch over fifty miles from the cliffs of Beachy Head.
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.