Critical Illness Articles
3 Important Facts to Consider Before Buying Critical Illness Cover
Both UK residents and insurance companies have felt the bite – and benefits – of critical illness cover. Since its introduction in the 1990s, critical illness has provided a much-needed benefit to those who have survived a critical disease and are unable to work. However, insurers have found that claims were more than they expected, as the number of purchased policies increased.
The Reality of Critical Illness Cover
As a result, critical illness became both a bane and a necessity to consumers. The policy became a bane because of high premium prices and the number of exclusions in covered conditions, resulting in high claim rejection rates. Nonetheless, the policy was still a necessity, as it was an affordable way to buy income protection should a person become seriously ill.
Insurers saw a trend in claims as well. More than half of all claims, about 55%, stemmed from a diagnosis of cancer. Experts who study cancer trends say that cancer rates could rise as much as 28% over the next 20 years, with certain forms of cancer rising as much as 70%.
This news has led insurers to prepare for an increase in the number of cancer claims. However, it is has also led them to change their policy language to be more restrictive on the types of cancer on which it will pay out.
What should you look for in a critical illness policy with all these changes? Here are three important facts to consider :
Redefining Conditions
Avoid a critical illness cover plan where the insurer wants to review the definition of a payable condition after the policy has been purchased. This practice only sets the possibility of payout in their favour, and it cheats the policyholder.
For instance, say you bought a critical illness cover that was clear on its accepted condition of colon cancer. However, a few years later, the insurer changed the definition to pay only in the most critical and dire instances of colon cancer. You have been cheated from a policy that you originally bought because the insurer decided to change the rules. Only buy a critical illness cover that will not review definitions later.
The Number of Covered Conditions
Look over the policy language carefully. The number of covered conditions is important for your possibility of a future claim. The more covered conditions, the better chance you will have of a payout.
Trustee Claims
When you purchase a critical illness cover, be sure that you will be able to make a claim through a trustee on your behalf if you become incapacitated from a critical illness. Without a trustee claim, you may not be able to make a claim and get your qualified benefit until a receiver has been appointed.
When you keep these three main facets in mind, you can choose the right critical illness cover that will provide you with the benefits when you need it most.
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