Critical Illness Articles
What Happens Behind the Scenes When I Apply for a Critical Illness Cover ?
Many people are bewildered about the process of applying for a health and life insurance policy. A critical illness cover, which is still relatively new to the British insurance market, is no different. This type of insurance provides a single, lump sum benefit should the insured become critically ill or injured as defined in the policy language. However, insurance companies do not just grant critical illness covers to any and everyone who applies.
The Insurance Company’s Point of View
Insurance companies must design products which are profitable, allow them to stay in business in the long-term, and give them the ability to make payments on legitimate claims. For critical illness covers, they use morbidity rates and statistics to approve applicants who are less likely to become critically ill.
When you apply for a critical illness cover, you will be asked to provide your complete medical history. This allows the insurance company to determine whether you are a low, average, or high risk for a future claim. A high risk applicant may pay much higher premiums or be denied coverage. Low or average risk applicants are more desirable and end up paying much less in premium.
Mistakes on Your Application that Could Risk Your Future Benefits
However, many people try to improve their chances of being classified as a “low” or “average” risk by leaving out particular information on the medical history form. Unfortunately, this practice can be devastating should you need to make a claim in the future. Any missed medical information that may be revealed later during a claim investigation can be grounds for denial. Even an omitted doctor visit for a minor, unrelated medical issue can cost you future benefits. Therefore, it is imperative that you complete a medical history statement honestly and thoroughly.
How Your Application is Analyzed
If your medical statement is adequate enough to assess your risk, the insurance company will make a decision about your approval or denial. Or, they may request additional information, such as copies of your medical records from your physicians, and even have you take a full medical examination. It is best to comply with any request from an insurance company regarding your proposal for insurance; this will ensure that they have the full scope of information and cannot deny a claim in the future because of incomplete data during the application.
Activating Your Critical Illness Cover
If your medical records and application provide sufficient information for the insurance company to make an approval decision, then the policy document will be prepared. The cover will not be in effect until a premium payment is made. However, before you pay the first premium, make sure that you understand any exclusions outlined in the fine print. The exclusions vary between policies and insurance companies, and you want to ensure that your coverage will be sufficient for your future needs.
Once the policy is active, then you will need to agree to a payment term. Insurance companies prefer yearly premiums paid in advance. Installment payments are acceptable, but it is likely you will pay a few dollars extra each month as an “installment fee.”
When you have completed all the above steps, your approved policy will remain in force until you choose to cancel it or make a claim. Remember, you must continue making premium payments to keep the critical illness policy in force. With your full medical history disclosed and continued premium payment, your critical illness cover will be there for you if you should need it.
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