Summary
The need for clarity and honesty when writing critical illness insurance policies. This article spells out the problems.
Very little is more distressing in life than to be diagnosed with a serious or chronic condition. Things are made much worse when your insurer informs you that they won’t pay out on your critical illness policy or private health cover for the HIV or cancer you are suffering from .
You are told to peruse sub-clause six of paragraph 325 of the small print, which informs you that you have got the wrong form of cancer. Only tumours below the hips are covered and only the first six days of your treatment will be paid for, and then it is up to you to find the finance.
This situation may sound ridiculous, although brokers and insurance companies are regulated, this type of procedure continues togo on. It has been a long drawn process to tidy up the industry and to make certain that consumers get a proper deal.
A short time ago Cancer Backup, a registered charity, highlighted this problem by organising a large assortment of shopping surveys, which exposed some disconcerting facts about the private medical insurance companies. It established that of most of the leading insurance companies only PPP provided cover for cancer patients throughout the length of their illness. Only the initial treatment is covered by the majority of health insurance policies. Care or treatment over a longperiod, such as hormone replacement or chemotherapy is normally excluded.
While life insurance companies and brokers want to finance long term cover for insurance holders with chronic illnesses, they won’t always make it clear to likely clients, at the time of taking out the policy what they are covered for.
Eeven though both Cancer Backup and Macmillan Cancer support have been in discussions with comparableestablishments within the industry to lift the standard of sales practices and make the phrasing of insurance documents much clearer, progress has been slow since the report was published two years ago.
Private medical insurance and critical illness cover is usually taken out by clients who are comparatively hale and hearty. The last thing that crosses their minds is getting cancer. That is why it is so vital to spell out an insurance policy’s exclusions before they sign up.
A statement of best practice for life insurance companies writing and selling medical insurance policies has been revised recently by the ABI, which is a much needed step in the proper direction.
The market body has now proposed that insurance companies and providers selling these kinds of insurance should orchestrate similar case studies, which explain the situations when a policy will or will not be paid. Regrettably insurance providers no requirement to adhere to this code, which is voluntary.
While the Association of British Insurers initiative is to be embraced, the best way of explaining a policy is by getting the salesman to explicate the small print.
In addition, industry jargon is in spite of everything even now being used by insurance companies to baffle the consumer. For instance it is wrong to classify cancer as an acute or chronic illness, disputes Cancer Backup. On the other hand insurance companies are insistent that it should go in the acute category. Consumers only learn about this when their claim is rejected.
Although the Association of British Insurers have got their responsibilities right, the insurance companies can only be required to improve their standards by the regulator. Better training of call centre staff, who sell the majority of the insurance policies, is also long overdue
More thorough marketing procedures are essential with terminology being eliminated. At the end of the day it it is the duty of the insurance companies to ensure that their clients fully comprehend the terms of their policies before they commit themselves.