Tell The Truth With Life And Critical Illness Insurance

by Michael Calliner

Insurers treat the non-disclosure of information on an application form very seriously indeed, and it is the most common cause for the rejection of a life or critical illness insurance claim. This true story explains that the situation isn’t always black and white, and demonstrates the severity of the penalty. We have changed some details to protect the anonymity of the policyholder.

Ms W had to have an operation to eradicate cancerous lymph nodes from her groin, and immediately fell ill after surgery with an infection she picked up in hospital. Critically ill, she had already made a claim on her critical illness insurance, however she received some unexpected bad news. Her claim was rejected and she was not going to receive the £200,000 she was insured for. How did this happen? Read on so we can explain.

June 2001 – Ms W went to see her doctor about an area of flaky skin on her back, she assumed it was something like eczema. Her GP wanted a specialist to have a look, and made a referral to a dermatologist. Before the appointment arrived, the patch of flaky skin cleared up, so Ms W cancelled the appointment, thinking no more about it. She did not imagine that it was anything serious, and the GP had not given her the impression that there was anything to worry about.

August 2001 – a sales representative from Ms W’s life insurer, Standard Life, called for a routine sales visit. Ms W’s circumstances had changed and she now had a young family depending on her. The sales rep suggested taking out a critical illness insurance policy, and she readily agreed. Ms W took out £200,000 worth of critical illness insurance.

The sales representative talked Ms W through the application form, filling in the answers on her behalf. When they came to the section about any incidences of referral from a GP, Ms W was unsure what the question meant, and asked the sales representative for clarification. According to Ms W, the sales rep told her that she only needed to mention a referral if it related to a serious matter. Ms W didn’t think it was worth mentioning the GP referral for the flaky skin, since she thought it was probably just eczema. She didn’t mention it so it didn’t go on the form. Ms W signed the form after completion and she applied for the Standard Life policy believing that she had provided all the required information.

Ms W soon received notification that she was insured for £200,000 in case she developed a critical illness.

Two years later – Ms W learnt that she had skin cancer, and major surgery quickly followed to try and remove the cancer. Ms W naturally made a claim on her critical illness policy, for which she fully expected to receive a £200,000 payout.

Soon after, Ms W received the rejection letter from Standard Life – the claim was rejected on the grounds of “reckless non-disclosure”. As far as the insurer was concerned, Ms W had withheld information on the application form, and this had invalidated her claim.

As you no doubt have realised, Ms W should have mentioned the GP referral to a dermatologist – and her failure to mention it resulted in a severe penalty. How could she have made such a mistake?

Two major errors were made:

1. When Ms W was asked to give details of any referrals she asked the sales rep what kind of referrals they meant. She was advised that she only needed to mention referrals relating to serious conditions. This advice was incorrect. The question asked for details of “all occasions her GP had referred her for tests or treatments”. ALL OCCASIONS means ALL – whether they were thought to be serious or not. The insurance company needs to know absolutely everything they ask for on the application form, and Ms W unfortunately did not provide that, thanks to the sales rep’s advice.

2. The GP did not give Ms W any indication that the flaky skin could be something serious, a fact that the GP stood by later. Ms W did not realise that the skin condition could be anything other than eczema, and so when told that she only needed to give details of referrals relating to serious conditions, she truly believed that her dermatologist referral was not worth putting on the form. She made this decision based on advice given by the sales rep, and it was a genuine mistake on her part.

Taking the above story into account, we think that Standard Life should realise that Ms W made an honest mistake, and did not deliberately withhold any information. The sales rep did not give the right advice, and Ms W followed that bad advice in good faith. It wasn’t her fault, and Standard Life should relax the penalty in this particular case.

Make sure it doesn’t happen to you

Filling out a life or critical illness insurance application form has to be taken very seriously indeed. You must read every single question and answer each one providing all the necessary information and detail. Withholding information is not an option, don’t be tempted by the thought of cheaper premiums because on making a claim, you will be found out and the claim will be invalid. Don’t take that risk!

Hopefully, Standard Life will see that Ms W did not deliberately mislead them, and they will give her the payout she deserves.

People that do deliberately mislead the insurers do deserve what they will eventually get – nothing.

NB: Standard Life rejects 5%, Friends Provident rejects 15% and Legal & General rejects 16% of all critical illness claims because of policyholders withholding information (whether deliberately or not). The insurance industry realise that they need to do something to address the situation, and are currently developing new ways to get information from applicants, and to publicise the severe penalties for not providing full and accurate information.

About the Author:
Michael writes financial articles for Life Insurance Quotes Online who offer life insurance and Mortgages

Tell The Insurers Everything When You Apply For Life And Critical Illness Insurance

by Michael Challiner

The failure to disclose information, especially medical information, is the most common reason why an insurer will reject a claim on a life or critical illness policy. To help underline some issues, we want to tell you a true story - but we've concealed the policyholders' name and a few other aspects to preserve anonymity.

Mrs A was fighting a secondary infection following surgery to remove cancerous lymph nodes in her groin when she received further bad news. Her critical illness insurer was refusing to pay out the £200,000 she was expecting. To understand why and the issues involved it's useful to understand how the events unfolded.

• In June 2001, Mrs A visited her GP after discovering a patch of flaky skin on her back. Mrs A thought it was eczema. During a brief consultation, her GP thought that it should be looked and recommended a referral to a dermatologist. But soon afterwards the flaky skin healed and Mrs A cancelled the appointment with the dermatologist. Apparently her GP did not express any major concern and some years later admitted that Mrs AP was in all likelihood unaware of the urgency of the referral.

• Nine weeks later a sales representative from Standard Life made a routine visit to Mrs A at her home. As Mrs A was now alone with a young family, the representative reviewed Mrs A's life insurance cover and suggested that she should also have a £200,000 Critical Illness policy. Mrs A thought that sounded a very good idea and willingly agreed there and then.

The sales representative produced the form and went through it, question by question, writing down Mrs A's answers for her. When it came to the question asking Mrs A to disclose all occasions her GP had recommended referrals for tests or treatments, Mrs A asked the sales representative what Standard was asking for. Mrs A alleges that the representative replied that Standard only needed details of appointments that related to serious conditions. Mrs A did not believe that her referral for what she thought had been eczema, fell into that category - so she did not mention it. She then signed the form honestly believing that she had disclosed everything Standard Life had required.

Standard subsequently accepted her application and issued the £200,000 Critical Illness Insurance policy.

• Two years later Mrs A was found to have skin cancer. Major surgery rapidly followed to remove the cancer. As her critical illness policy included cover for her cancer, Mrs A then made what she thought was a valid claim.

• Standard Life subsequently rejected her claim on the basis of “reckless non-disclosure” – the insurers' jargon for Mrs A's failure to disclose her cancelled appointment with the dermatologist.

The Issues

The events that followed showed that Mrs A's application should have included her referral to the dermatologist. So why didn't she disclose the information?

It seems that two aspects conspired to create the situation: Standard Life's sales representative told Mrs A that the question on the application form asking for “all occasions her GP had referred her for tests or treatments” as only relating to serious conditions. That interpretation was fundamentally wrong. The question asked for ALL OCCASIONS. These questions are worded carefully and ALL means ALL - it is not asking the applicant to make a personal judgement as to whether the grounds for the referral were serious or not. The representative was clearly wrong.

Secondly, the GP did not apparently convey to Mrs A the potential seriousness of her flaky skin and her referral to the dermatologist. If, when the insurance application was being completed, Mrs A was unaware that her condition was potentially serious and the representative said the referral question only related to serious conditions, Mrs A can hardly be held responsible for not disclosing that information.

In our view, and on the basis of the information provided to us, Mrs A is not to blame. Standard Life's representative made the vital error. He gave incorrect guidance on what the question at the heart of the dispute, was asking for. In our view Standard Life should pay out.

The lessons to be learnt

Always very carefully read each question on an insurance application form - and answer the question FULLY and ACCURATELY. Do not be tempted to be economical with the truth. If you do omit something they ask for, the insurance company can rightfully claim that you mislead them by omission. Never be tempted to omit some information in order to qualify for a cheaper premium. You might get a cheaper premium, but that's a false economy if a subsequent claim is rejected.

We hope Mrs A will get her payout as she was mislead by circumstances beyond her control. We believe she acted honestly. She deserves her payout and our best wishes.

However, those applicants who deliberately withhold information from their insurer or who provide misleading information, do not.

Postscript: Reports show that Standard Life refuse 5% of all Critical Illness claims due to non-disclosure. Some other insurers have much higher figures - Legal & General reject 16% and Friends Provident reject 15%. The insurance industry is trying to improve this situation by the ways they seek information from applicants and by the way the penalties for no-disclosure are explained.

About the Author:
Life Insurance Articles Critical Illness Articles

Critical Illness Insurance – The Press Are Giving Insurers A Hard Time

by Michael Challiner

Recent stories in the press have again lambasted the insurers over critical illness insurance. The core problem is that a critical illness claim is not as straightforward as, for example, a claim under life insurance. With life insurance it's going to be hard for the insurance company to argue that you're not dead!

By their very nature, critical illness claims are much more complicated. The insurer will need to satisfy itself that the claim is validated in three key areas before it meets the claim: -

Has the illness been correctly diagnosed?

Is the confirmed illness included in the schedule of insured critical illnesses covered by the policy?

Did the policyholder fully disclose their medical history and current state of health on their original application form?

On the first point, it's obviously in the policyholder's interest to verify the medical diagnosis - so there's rarely ever any conflict between the insurance company and the policyholder on that issue. It's the next two areas which the insurer needs to validate, where conflicts seem arise.

With constant development in the medical knowledge, from time to time there can be some situations where validation falls into a grey area – a policyholder will argue that their specific illness is insured whereas the insurer will argue that it isn't. Insurance companies are aware of this problem and they often change the wording in their policies in an attempt to clarify the scope of the cover and eliminate areas for dispute. Nevertheless, disputes do happen all too frequently and sparks fly when a policyholder thinks his illness is covered but the insurer disagrees.

A case in point comes before the Courts shortly. Mr Hawkins from Staffordshire is suing Scottish Provident for £400,000 under the terms of his critical illness policy. Basically, his medical advisers believe his illness is insured whereas the insurers' medical advisers disagree. If the Court find in favour of Mr Hawkins the press will have a field day - and the critical illness insurers will suffer further bad press they can sorely afford.

Another summons, filed recently in the High Court and again involving Scottish Provident, highlights the problem when an insurer considers that a claimant mislead them on his or her original application form. Our understanding is that if an applicant omits relevant information or provides misleading information on their application from, this amounts to obtaining insurance on false pretences. This summons has been issued on behalf of Thomas Welch from London who is suing Scottish Provident for £206,800. The issue goes back to 2000 when, a few years after first starting his critical illness policy, Mr Welch received confirmation that he was suffering from testicular cancer. The insurer refused the claim because of “non-disclosure alleging that Mr Welch had not been honest about his smoking habit. He does admit that he did smoke earlier in his life but is resolute in saying that he had long since given up when he applied for critical illness insurance. As such, Mr Welch believes that he did complete the application honestly.

We assume that the case will centre upon whether Mr Welch accurately answered the smoking questions on his application. Most insurers define “a smoker” as someone who has smoked, or has otherwise used, nicotine products within the previous 5 years. (Some insurance companies adopt a 1year cut off.) If Mr Welch had indeed smoked during the specified years, he would have been obliged to disclose such information on the application and the insurer would have priced his insurance accordingly. In this context, it is relevant to note that smokers are charged as much as 65% more for critical illness over than non-smokers. We anticipate that Mr Welch's lawyers will argue either that he did not smoke during the period in question or he omitted the smoking information by pure oversight and in any event, his past smoking is not irrelevant to his testicular cancer. Interesting issues and we'll let you know the outcome.

Mr Hawkins case is fundamentally different. It illustrates the problems that can arise if policy documents imprecisely describe an illness or if the technical diagnosis of an illness provides the scope for medical professionals to disagree. Either way the issues are entirely outside the policyholders control at a distressing time for them and their families and we must appreciate their anguish. The long-term solution must lie in improving the medical definitions within the policy. It is probable that this will result in more medical jargon that the average man in the street will find difficult to understand - but perhaps that is preferable to what Mr Hawkins is going through.

Mr Welch's court case must stand as a clear reminder to everybody that applications for insurance must always be totally accurate and completed in good faith. We recognise that in some cases this may still leave room for dispute (and Mr Welch's case may be an example), but if an applicant fails to complete the forms accurately, they are taking the great risk and any claim they make could be rejected.

Rightly or wrongly, the newspapers have a history of giving the insurance companies a hard time, casting them as heartless big business. This serves to reinforce the public's feeling that insurance companies are devious and not to be trusted - especially it seems, in respect of critical illness insurance. This view is reinforced by the fact that around 20-25% of critical illness claims are rejected (although this rejection rate does vary between insurers). This issue is something that insurers must come to grips with – it's bad for clients and undermines confidence in insurance - and that must be bad for the development of the insurance industry.

In fact to put no finer point on it, it's a tragedy. As many as 1 in 6 women and 1 in 5 men will be diagnosed with a critical illness before their normal retirement age*. As such, critical illness insurance is vastly important for the protection of family finances. The problems we have highlighted are obviously contributing to a situation where almost everybody needs critical illness insurance, but fewer and fewer of us are taking it up.

About the Author:
Michael writes for Express Life Insurance who offer life insurance quotes and critical illness insurance. Click here for more life insurance topics

Big Changes On The Horizon For Critical Illness Insurance

by Michael Challiner

In recent years sales of critical illness insurance have flagged. The primary cause is the huge 70% increase in premiums experienced during recent years. For many, critical illness insurance has simply priced itself out of the market.

It's not that critical illness insurance is a bad idea. After all it pays out a lump sum if the policyholder is diagnosed with one of the many critical illnesses listed on the policy and the policyholder survives at least 28 days from diagnosis. (Note: some policies have a 14 day survival period.) Most policies have a huge list of insured illnesses although about 60% of claims are for cancer – not surprising, as 1 in every 3 people will develop cancer sometime in their lifetime. In fact when you look at the concept of Critical illness insurance you can easily make a case that everyone living on earned income should have a policy. It's designed to give you a pot of capital to live on if serious illness prevents you from working normally.

Premiums have increased dramatically because medical advances have meant that many illnesses that proved fatal in the past are becoming quicker to detect and easier to treat. Hence insurance companies have found themselves paying out earlier on claims and on illnesses which are not necessarily debilitating - which was the original purpose of critical illness insurance.

To give you a better idea of the sort of illnesses we're talking about, here's a typical list:

Alzheimer's Disease
Aorta Graft surgery
Bacterial Meningitis
Blindness
Brain Tumour
Cancer
CJD
Coma
Coronary Artery by-pass surgery
Coronary Artery Angioplasty
Deafness
Heart attack
Heart Valve replacement/repair
HIV/AIDS resulting from blood transfusion
Inability to perform your duties of occupation
Kidney failure
Leukaemia
Loss of limbs
Loss of speech
Major organ transplant
Motor Neuron diseases
Multiple Sclerosis
Occupational HIV/AIDS
Paralysis
Paraplegia
Parkinson's disease
Stroke
Third Degree burns
Any illness that results in Total and Permanent disability

Insurance companies have at last realised that they're not going to get anywhere marketing policies that people can't or won't afford, and where the companies can't afford to lower prices. So it now looks as if insurers such as Scottish Widows are considering a break through – splitting the cover so that the prospective policyholder can specify which illnesses he or she wants to insure against. It's a form of “menu pricing” – cover for each illness would have a price and you simply select which illnesses you want to insure against.

Whether such insurance proves popular will very much depend on the cost. For example, if cancer accounts for around 60% of current claims, you'd expect the premium for covering cancer alone to be about 40% cheaper than a full strength critical illness policy. We'll have to wait and see.

If you're interested to find out how much a standard critical illness policy would cost you, you'll find it cheapest on the Internet. The best sites to look out for are the independent discounting brokers who deal with all the big insurance providers. These brokers can search the whole market for you, come up with the cheapest insurer, and discount their price. Try to use a broker who'll also give you personal advice on the phone as some policies do vary in the scope of their cover.

About the Author:
Michael writes for Scrouge Life Insurance who offer life insurance quotes and critical illness insurance. Click here for more life insurance topics

The Growing Popularity And Importance Of Critical Illness Cover

by Victoria Selman

Critical illness cover is one of the most popular and fastest growing insurance products available in the UK. This is shown by the fact that there was a 31% increase in the number of critical illness insurance policies sold between 2001 and 2003.

This article discusses what critical illness cover is and how it could help you.

What is Critical Illness Cover

Critical illness insurance pays out a tax free lump sum to policy holders if they are diagnosed with a serious illness which is covered by their critical illness plan. Examples of serious illnesses covered by critical illness insurance policies include; strokes, heart attacks and cancer.

Policyholders can use this money in any way that they wish such as for medical care or to cover living costs that they cannot otherwise meet owing to loss of income.

Who Should Consider Critical Illness Cover

Most people do not like to contemplate the fact that they might become seriously ill and assume that it will not happen to them. However, statistics demonstrate how widespread serious illness is and that we should face the fact that we might suffer from it at some point.

For example, 100,000 people in the UK have strokes each year and almost 8,000 of them are under 55 years old. Of these, a third die within twelve months and another third, over spend the rest of their lives disabled.

Furthermore, in the UK, 300,000 people have heart attacks each year and 80% of sufferers aged between 45 and 65 survive. Whilst over 30,000 women are diagnosed with breast cancer annually many of whom survive for a number of years but continue to need medical treatment.

Benefits of Critical Illness Cover

Given that so many people who are diagnosed with serious illnesses go on to survive but need ongoing medical treatment and often cannot continue working, critical illness insurance can provide a very welcome financial safety net.

About the Author:
Critical Illness Insurance Information site: http://www.critical-illness-insurance-uk.org.uk

Critical Illness Insurance – Critical Or Ridicule?

by Rachel Lane

Critical illness cover (CIC) is a type of insurance which provides a significant one-off payment if you are diagnosed with a specified life-threatening condition – specified being the important term, because if your illness isn’t in the terms and conditions – you won’t get the payment. Over the recent years, critical illness cover has gained in popularity due to lower costs and apparent simplicity.

Critical illness insurance can be sold as part of a mortgage package or additionally as a stand-alone policy. Critical illness cover can also be commonly associated with life insurance, with certain CIC policies paying out either on the diagnosis of a particular illness or on death, but not both, whilst other CIC policies pay out in both events.

When you first purchase the critical illness insurance policy, there might be an option for buy-back insurance, this would permit you to buy additional critical illness cover or life insurance, typically at a minimal cost, after you have made a claim on your existing CIC policy. Such an option is often worth considering , as the survival rates from a critical illness are usually very good and it can be extremely difficult to obtain new cover following a critical illness. Buy-back critical illness cover usually protects against the three major critical illnesses: heart attack, stroke and cancer from which you are most likely to recover, but also risk an attack later in life.

Bear in mind that when you take out life critical illness insurance, there is a standard waiting period between diagnosis and possible payout, from six months to a year for certain conditions, such as total permanent disability. However, if the diagnosis is very transparent, it is possible that the insurer would consider waiving the waiting period. The maximum payout varies from policy to policy, thought it’s not unusual to see capped payouts of £500,000 or £1 million, though cover for higher amounts might be available on request. When the policy is sold as part of a mortgage package, the lump sum is designed to pay off the loan on the home, but with other policies, there may be no restrictions on how you use the money. Suggested uses may encompass covering living expenses whilst you are off work, though the money could additionally pay for private medical treatment, carer services, home improvements, career retraining, help for your dependents and even a holiday or break away.

Nearly all critical illness insurance policies cover seven main conditions: cancer, heart attack, stroke, kidney failure, coronary artery bypass, multiple sclerosis and major organ transplant. Policy exclusions in critical illness insurance may include Alzheimer’s or Parkinson’s disease if diagnosed after the age of 60. Don’t be seduced by long lists of ailments – as other policies may include these but under a broader heading. It is important to note prior to taking out a policy, that there may be certain exclusions in the insurance contract which may prevent payout due to life choices and circumstances. According to the Association of British Insurers, the most common exclusions include:

* Aviation
* Criminal acts
* Drug abuse
* Failure to follow medical advice
* Hazardous sports and pastimes
* HIV/AIDS
* Living abroad
* Self-inflicted injury
* War and civil commotion

The consumer organisation estimates that two thirds of the population suffer from a critical illness at some point in their lives. However, whilst the principle of critical illness insurance might be relevant, it is always worth ensuring your policy meets your exact needs, so if the worst happens, you’re not caught out by the small print. It’s important to shop around for quotes and different policies. Comparison sites such as moneynet and moneysupermarket will allow you to do this.

About the Author:
Rachel lives with her high horse in the Scottish mountains, near Edinburgh. Rachel writes for the personal finance blog Cashzilla: http://www.cashzilla.co.uk

What Can Critical Illness Cover Be Used For?

by Mike Armstrong

Critical illness insurance may sometimes be confused with private medical insurance. Private medical insurance may pay for the treatment procedures in the event of a critical illness. Critical illness cover is also separate from income protection. Income protection insurance pays out usually in case of lost of work due to accident or illness. The payment may last until 1 year. Let's have a look at what can critical illness be used for.

Critical illness insurance can help you in the future if you are now going to start a new family. By doing so, you may be ensuring the protection of your wife as well as your future children. Also, if you buy the critical illness policy at an early stage of your life, you may get to pay low premium values. Sometimes, premiums may depend upon your age and your health condition. If ever you succeed in crossing the whole policy term in good health, you could be awarded a survival benefit that may therefore help you enjoy a better retirement.

Moreover, critical illness insurance may help you protect your mortgage if you have one. Otherwise, it may even help you protect your income. Many people may buy critical illness insurance depending on how much mortgage remains to be paid. Regarding the mortgage, some people might even decide how much cover they might want from critical illness insurance. Thus, when a payout is made, the mortgage can be settled hassle free. Furthermore, for example if you suffer from a critical illness such as heart attack, you might be unable to attend work. Consequently, your income may be lost. Critical illness insurance might then ensure a payment. This payment may act as a replacement of your loss income. Thus, your wife and children may be able to continue leading the daily lifestyle.

In addition to, buying a critical illness cover combined with mortgage might become a disadvantage in the future. The lump sum that will be awarded should you fall critically ill may decrease as your mortgage repayment also decreases. It can therefore be a good practice to have separate critical illness and mortgage protection policies. If you already use the mortgage payout, you could rest assured that the critical illness policy may still be in force. Hence, any dependants that you have may still be further protected should you be unfortunate enough to fall prey to a critical illness afterwards.

Nearly all critical illness policies cover seven major critical illness conditions. These can be considered as cancer, stroke, heart attack, multiple sclerosis, renal failure, coronary artery bypass and major organ transplant. Some policies or insurance companies may also pay out if you suffer from total and permanent disability resulting from illness or accident. The Association of British Insurers had also set new rules as from May 2003 that insurers must abide with. The conditions under which critical illness claims have to be made had been redefined. For example, non invasive skin cancers and less advanced conditions of prostate cancer may not be covered. For heart attacks, the ABI demands evidence of chest pain or possible changes in the ECG for critical illness claims to be successful.

While the advantage remains significant with critical illness insurance, strictness towards accepting a claim tends to increase. However, the important fact remains that you should be very careful to read all conditions on your critical illness policy before finalising an agreement with your insurers.

About the Author
For more information about life insurance and critical illness insurance please visit www.unbeatablelifeandcriticalinsurance.co.uk.

Critical Illness Insurance Developments And Statistics

by Mike Armstrong

Standard Life one of the most famous insurance companies in the UK had revealed its reports for the year 2005. Around 82 percent of critical illness claims may have been successfully paid since the year 2005 by Standard Life. These claims may have a reached a total of around GBP 20 million. Compared to the year 2004, only around 80 percent of critical illness claims could have been paid.

The rise in critical illness claims may mean that cases of non disclosure or non meeting policy definitions may be eventually decreasing. However, in the year 2005, 18 percent of critical illness claims could have been rejected. Out of these, 10 percent could have been due to not meeting policy definitions. The remaining 2 percent may have been due to non disclosure. Also, around two thirds of critical illness claims may have been made on policies that have been ongoing for an average of four and a half years. Trevor Matthews from Standard Life affirmed that the shift from the 2004 has been small but positive concerning the amount of critical illness paid out. He also said that Standard Life do not turn down claims without specific reasons.

Furthermore let's see at some global statistics concerning critical illness. Nearly 1 out of every 4 people may suffer from a heart attack. Around 8 out of every 100 people may contract stroke while 1 out of every 3 people may be diagnosed by a critical illness such as cancer. As we see these figures, the chances of contracting cancer may be higher than stroke. But heart attack may also be the second case responsible for most critical illness claims in the UK. Moreover, according to Framingham Heart Study, around 77 percent of males aged between 35-54 may survive a critical illness such as heart attack. On the other hand, 56 percent of men of the same age group may survive for 10 years while 47 percent may also survive for 13 years. The survival rate for a critical illness like heart attack may have increased considerably. In the year 1950 the survival rate may have been 11 percent as compared to nowadays which may be around 71 percent.

Additionally, around 50 percent of cancer sufferers may be expected to be still alive 5 years after intervention or diagnosis. Further results show that around 10 percent of stroke patients may recover from this critical illness completely. Unfortunately, stroke may cause someone to be disabled. As a matter of fact around 53 percent of its victims may require dependency. As the medical industry improve, more lives may be saved as critical illness conditions may be detected much earlier. Therefore, the life expectancy for men nowadays may be approximately 78 years whereas for women the value may be about 83 years.

At first when critical illness insurance was launched, the policy covered around five critical illness conditions. This gradually changed to seven and finally to twenty nowadays. In the year 2003 nine diseases may have been covered namely heart attack, stroke, MS, kidney failure, CABG, stroke, paralysis, Parkinson's disease and cancer. In the year 2003, critical illness insurance may have already made a success in the UK with over 1 million policies sales. Back in the year 1992 less than 200,000 policies may have been sold. The amount eventually increased until in 1999 there had been a real boost. Around 783, 166 critical illness policies may have been sold representing an increase of about 12.8 percent (694,263) over the year 1998.

Critical illness insurance may be expected to grow slightly till the year 2008 as more and more people may be seeking for protection. Whether it is to protect the family or oneself, critical illness insurance can be the right choice.

About the Author
For more information about life insurance and critical illness insurance please visit www.unbeatablelifeandcriticalinsurance.co.uk.

Some Conditions That Apply To Critical Illness Insurance

by Mike Armstrong

Critical illness insurance may sometimes surprise us with some cases, in this case, antiselection. For example, people already suffering from a critical illness may have applied for a critical illness policy without making their insurers aware of the disease. But precautions can be taken against such cases. In fact the policy documents may contain a section named as the waiting period. The waiting period may vary according to the critical illness conditions and can be between two to six months. Critical illness insurance may cover the person only after the waiting period had passed.

Moreover, if the critical illness insurance provides an additional benefit, there may be a survival period alongside the waiting period. Should a critical illness take place, the patient may have to wait for the end of the survival period before a payment is made. The survival period may only last two weeks. One month can be the maximum waiting time.

Furthermore, the highest age of entry at which a person can buy critical illness cover may be 55, the age of maturity being 65. This may vary from one market to another and can also depend upon the decision of a company. Companies may tend to insure less people having reached the age of maturity. The statistics about their critical illness claims may not be as reliable and also claim rates may not remain fixed from year to year.

Knowing the rate at which a critical illness occurs may be a difficult task. Some countries may not have reliable and accurate statistical data sources which can be used to determine the severity of a critical illness, for example among men. Figures may help to study which critical illness conditions affect men mostly, for example heart attack. Other results may also demonstrate people of different age groups that suffer a specific critical illness. Therefore, assuming the rate of antiselection may also be inaccurate. So, the risks to have antiselection amongst all the critical illness policies may still prevail. Additionally, some problems may have to be solved regarding critical illness cover. Rapid improvement in the medical and diagnostic science may also influence the rate at which a critical illness occurs.

A critical illness such as cancer for example may be detected much earlier especially with improved cancer research tactics. This may therefore lead to a higher incidence rate of cancer. Another example could be the cover of coronary artery surgery. Effective medical techniques and instruments have made it possible for the critical illness to be diagnosed more often than before. As a matter of fact, figures that are being registered about the rates of incidence may become outdated. Hence critical illness may have a big risk of change and may continue to do so down the years. Looking at the rating risks, companies tend to restrict premium guarantees to five years. Single premium might also be offered for only a short lapse of time.

For a company to provide critical illness cover, it may put forward factors such as policy conditions, pricing, age limits, etc. Nowadays, many insurance companies may be bringing new design to their products to compete effectively in the insurance market. Low premiums and high benefits is what sometimes you may come across but everything and every condition may tend to vary from one company to another in the insurance market.

About the Author
For more information about life insurance and critical illness insurance please visit www.unbeatablelifeandcriticalinsurance.co.uk.

Critical Personal Protection Issues - Quality of Insurance Cover

First of all – the quality of your protection policies.
Protection - the policy conditions minefieldLet's use an example. Dr Cureall, a family man with a large mortgage, has decided it is high time he sorted out his protection requirements.

He wants to know what types of protection there are, and approaches us to ask for advice.

We explain there are 3 types of cover:

•Life protection, paying out a lump sum or income over a certain period of time if you die

•Critical Illness protection, a lump sum paid if you have a specified illness or are totally incapacitated

•Permanent Health Insurance, an income paid to your normal retirement age (or while you are ill) if you cannot work for health reasons

Dr Cureall decides he would like to cover all eventualities (next newsletter explains why this is a good idea). The cover linked to the mortgage will be a reducing benefit (he has a repayment mortgage), whilst the family income benefit will be indexed to take into account of inflation. The aim here is to pay off the mortgage and leave enough for his wife and children to continue their lives without any financial worries.

So let's look at each type of protection:

Life CoverThis is the easiest type of cover to understand. It pays out a lump sum on death and normally the policy to buy is the cheapest one the Cureall`s can find. They may want guaranteed premiums, which means that the insurance company will not increase their future premiums if they are paying out a lot of claims and need to increase their premium to compansate for this. The alternative is reviewable premiums.

Secondly, and crucially, the policies must be written under trust for the beneficiaries. This means any monies will not form part of Mrs Cureall`s estate, and therefore not compound any inheritance tax issue, but still ensuring the Cureall`s will receive their money (potentially saving thousands of pounds of Inheritance Tax).

In our experience, the majority of life assurance policies are not written under trust.

Critical IllnessThis type of protection has become more popular in the last few years, particularly with a view to paying off debt. It is often taken out in conjunction with income protection (PHI).

Since this form of protection is dependant on the number of conditions covered and their wording, there can be a huge difference between companies.

Let's look at a couple of examples:

Heart attacks account for a large percentage of claims. Many companies will insist on there being 'typical chest pain' present for them to pay out amongst other criteria. However, a small proportion of companies do not stipulate this and may be more attractive.

Total Permanent Disability is seen as a 'cover all' if the condition does not fit a specific illness listed in the policy conditions. So if Dr Cureall cannot work then we could assume he'd be covered. Maybe, but not always. Many companies specify in their occupation definitions that the claimant must return to work if they are 'suited' to another job or even worse can perform 'any' type of job. Not very reassuring if you find you have this type of plan as a doctor or dentist. Where possible, you should make sure the plan has an 'own' occupation definition (which may not normally cost you any more money).

Permanent Health InsuranceThis is a crucial part of protection. Whilst thousands of pounds have been paid in claims over the years, you really do need to be aware of the pitfalls:

• Own occupation not specified

• The classification of occupation increases premiums to far higher levels

• Exclusions such as mental illness

• No "waiver of premium" meaning you still pay your premium on receipt of benefit

• Premiums are not guaranteed, meaning they are vulnerable to increases

• A poor choice of deferment periods (when the income starts to pay out)

• No option of indexed protection to protect from the effects of inflation

It is interesting to note that out of the top 14 companies that would be price competitive for the type of cover discussed, we would typically only use 2 because of the quality issues!The Financial Tips Bottom LineIt's likely you have bought one or more protection policies.

We're often surprised at how many doctors and dentists have policies with small print NOT working in their favour. We urge you to check your policy documents and make sure you're not paying for something that may not pay out anyway. Over the life of a policy we're usually talking about thousands of pounds, so don't put it off!

ABOUT THE AUTHOR
Ray Prince is an Independent Financial Planner with Rutherford Wilkinson plc, and helps UK Resident Doctors and Dentists get the best deals on mortgages, protection and investments, as well as helping them achieve their financial objectives. Click here for Financial Advice for UK Doctors and Dentists and to get your free retirement guide, How To Avoid The 7 Most Common Retirement Planning Mistakes. Rutherford Wilkinson plc is authorised and regulated by the Financial Services Authority.

The Use Of Critical Illness Insurance

by Mike Armstrong

Critical illness insurance made its first apparition in South Africa in 1983 and was known as dread disease insurance. Before 1983, policies having the name cancer policy may have been sold in the USA providing cover for certain types of cancer. These cancer policies may be considered as the foundation of critical illness insurance. Gradually, critical illness insurance went worldwide and nowadays plays an important role in markets such as UK, Canada, East Asia, Israel, etc.

Critical illness insurance may award a tax free lump sum if the insured person is diagnosed with one of the critical illness conditions defined by the policy. Almost all critical illness policies offer cover for cancer, stroke, heart attack, kidney failure and coronary artery bypass surgery. While some insurance companies may cover only seven or eight critical illness conditions, others may offer cover for up to 35 diseases. Critical illness insurance may help someone cope with the financial imbalance especially after diagnosis of a life threatening illness. The financial support may as a matter of fact help to manage a changed lifestyle.

Critical illness insurance was called dread disease insurance long ago in South Africa. The term being too strong and unsuitable for many markets as well as marketing purposes, made many companies refrain from applying its usage. However, critical illness insurance may be preferably referred as crisis cover, trauma cover or living insurance. The rules which stipulate that critical illness cover must cover only severe conditions may no longer apply. It may also be used as a means for financial security against numerous critical illness conditions. Insurers therefore tend to provide a wider choice of critical illnesses covered under their critical illness plans. By doing so, they hope to target a wider audience and also to compete effectively in the insurance market.

Moreover, critical illness insurance may be useful to people who have social insurance that does not pay big to cater for a serious illness. A critical illness can imply high costs for treatment purposes. As a matter of fact, critical illness cover may be mostly wanted in countries where the state social security systems are inadequate. Even if a good health security system exists many people may still want critical illness insurance. The reason may be because everyone wants to get the best medical care and treatments. Thus, critical illness insurance payout will allow them to do that either in a renowned clinic or overseas.

Furthermore, the additional benefits in the form of critical illness insurance may not necessarily mean paying for medical charges. The aftermath of a critical illness may sometimes be considerable. The house or living environment may have to be altered to accommodate the life a disabled person. A car can also become an important factor as a mean for facilitating mobility needs. Also, after enduring a critical illness, in most of the cases a person becomes unable to attend work. Critical illness insurance payout can once more stabilise financial pressure by settling debts or mortgage.

Critical illness insurance policy may be presented in a professional manner to the client providing him with every information that he needs. By doing so, a much friendly approach may be created while confidence over the product may arise. This may therefore lead to many critical illness cover sales.

About the Author
For more information about life insurance and critical illness insurance please visit www.unbeatablelifeandcriticalinsurance.co.uk

Life and Critical Illness Insurance - Good health?

by Michael Challiner

According to an EU study, whilst we in Britain can expect to live longer than ever, it doesn’t follow that our general health has improved. Read on for some worrying facts.

In common with the rest of Europe, life expectancy in Britain is increasing. A man can now expect to live to 76.2 years and a woman to 80.7 years. This is wonderful news, but unfortunately we also learn that Britain is not keeping pace with most of Europe in another health aspect.

Healthy life years, as well as life expectancy have been the subject of a recent EU study and the results were based on questionnaires which were completed by some 60,000 householders. The focus of the study was on death, sickness rates and overall health.

We learn that although the average British male can expect to live to 76.2 years of age, he can only expect 61.5 of these years to be free from a disabling condition. This puts us in the unfortunate position of being the fifth unhealthiest group in the EU.

Research into these findings, still at an early stage, has not yet found the reasons for the wide variations across the EU. It seems that as far as cardiovascular disease is concerned, there is an increasing risk the further north you go and Help the Aged feel that a lack of respect for the cold in Britain constitutes a risk to health.

Italy holds the top position in the healthy living stakes, with an expectation of 70.9 healthy years and a life expectancy of 76.8 years. The healthy Italian diet, including lots of fish, vegetables and unsaturated fats, may be a key factor in their country’s excellent health record. A spokesman for Help the Aged comments that diet, smoking, the weather, smoking and health service could help to explain the differences

Interestingly, in a published table showing both healthy years and life expectancy, as far as healthy life goes, Italy tops the table, followed by Spain, Germany, Poland, Netherlands, UK, France, Hungary, Portugal and Finland. It will be interesting to see what the final conclusions turn out to be.

At the bottom of the scale - if you come from Finland, life expectancy for a woman is 81.8 years, but you can only expect 56.5 of these to be without a disabling condition.

Bearing all these facts in mind, it’s obvious that, for Mr and Mrs Average, it would be as well to give some serious thought to the provision of both critical illness cover and life insurance. It’s a serious thought that the expectation of a disabling health condition precedes retirement age by between three and half and eight and a half years. Many men now expect to be able to work until they are 70.

Critical illness insurance will pay out a specific sum if you’re unfortunate enough to be diagnosed with one of a list of specified conditions, such as cancer, stroke or heart trouble. Read the policy carefully to check which conditions are covered. The effect of critical illness on your lifestyle can be immense. You may have to adapt your car or your home and even change your employment to suit your new circumstances. Critical illness cover will give you peace of mind should illness strike.

As far as your family are concerned, it would be a good time to take out, or review, your life insurance plans. Would their lifestyle be affected should the worst happen?

Both of these insurances can be taken care of easily. The internet is the place to go for immediate attention and a range of competitive quotations. Contact an on-line broker, who’ll offer you all the help you need.

Then sit back and prove the tables wrong.

ABOUT THE AUTHOR
Get great articles on life assurance from life insurance professionals http://www.life-insurance-professionals.co.uk.

Watchdog wary over Critical Illness Insurance

by Michael Challiner

You may have taken out a critical illness policy, but do you know it only insures you for certain conditions? Many people don’t.

You have taken out a critical illness insurance policy so that if you ever are in the unfortunate situation of developing a life threatening condition, you will be compensated.
But what if you wind up with a critical illness that is not guarded against on the insurance policy? What many people do not realise, and what can be of real concern, is that you may find that after you have purchased critical illness insurance you are only covered for up to 35 listed medical conditions. And this is the deal with most insurance policies. So if you develop a life threatening illness not named in your policy you could be faced with the disastrous situation where you get no pay out from your insurance company at all.

On the other hand, it could be that you have an easily treatable sickness and because it is ranked with what the insurance industry calls a “lower grading”, you end up getting a full payout. The Financial Services Authority and the Association of British Insurers are wary about whether insurance companies actually make these differences clear.

Jonathan French, a spokesman at the Association of British Insurers, says it is important that customers have an insurance policy fully explained to them before it gets purchased. “The situation we would not want to see occurring is for them to be buying a product thinking that it does something it doesn’t do.”

And for this reason, the ABI recently updated its codes of best practice for critical illness insurance. French says until recently, 35 conditions was the maximum number any company covered for critical illness insurance. “What we set out are essentially the minimum standards companies have to apply to their policy. The guidance we have published improves the way the critical illnesses are defined. It makes it clear to consumers what levels of illness are covered and what aren’t.”

The cost of critical insurance varies. For someone in their late 30s for a 35-year term with a payout of £500,000, premiums cost anything up to £600. Scottish Equitable charges premiums of £290 and Scottish Provident charges £409 premiums for policies based on these conditions. Both these policies are reviewable. A guaranteed policy with Scottish Provident is £560.

So these figures give you an idea that the amount of money you pay out for this type of insurance can be expensive. You can imagine how infuriating it could be to find that you have paid out on the policy only to learn that when you do become critically ill your insurer will not pay you out. There is now, however, a new critical illness product on the market. Prudential is marketing a new ‘Flexible Protection Plan’, which covers up to 140 medical conditions.

In the ‘Flexible Protection Plan’ there are partial payouts depending on the severity of the condition. If the condition worsens, there is more paid out to the maximum sum which has been insured. Most other policies do not offer partial payouts.

Take loss of eye-sight for an example. It would normally be the case with a critical illness policy that you would only receive a pay out if you became completely blind. But the Prudential policy will pay out 25% if you loose sight in just one eye.

But here is the catch. The cost of the policy is almost twice that of conventional illness cover and spectators worry that there will be some confusion about how the severity of an illness would be defined.

ABOUT THE AUTHOR
Life insurance specialists great articles based on cheap life insurance all online.