Most professional  advisors would concurthat Financial Protection Insurance is extremely important to most families, either as a safeguard in the event of cover for an accident, loss of employment (especially in the present economic climate), prolonged illness or premature death.

Life Insurance is the foundation of all financial assurance to ensure a lump sum that is not taxable, in the event of a death or for cover for a mortgage.  Regrettably, a proportion of other Protection Insurance policies, do not have the samedo not have similar} sound qualities and have been branded as being miss-sold.  Also, based on what we are now aware, critical illness cover has suffered due to startling exclusions from insurance policies making it possible for insurance companies to reject claims even when they are genuine.

However, a little faith was re established when Standard Life reported on the conclusion of claims on Critical Illness policies on their 1/2 yearly figures. 

Critical Illness claims were being rejected because customers did not divulge their full health history.  As a result Legal and General  says that in the last five months the amount of declined claims has fallen substantially from 5.7 per cent in the last year, to 2.3 per cent.

Why?  We think, not simply Norwich Union but all insurance companies, because of destructive public relations, have been placed in a position whereby they must reduce the amount of claims that are rejected. Does this confirm how influential the press can be?  Debateable perhaps – you may think we are sceptical but we believe there are other issues that encouraged the insurance companies to make changes.  A short time ago, as a result of |bad press|dire media}, sales of Critical Illness Cover  have declined which in turn has obviously influenced the insurers profit. This was probably the catalyst that promoted the change!

Norwich Union, Scottish Provident, Axa and Friends Provident have initiated some prominent changes purposely designed to reduce their rejection rates. To begin with, they silhouette clearly that all health disclosure, however insignificant a visit to a Doctor might have been, must be includedmade known.  Friends Provident, together with others will get a medically trained person to telephone every candidate to go through all the details of their medical history.  If the policy then goes on risk, a number of policyholders are being informed that it is important that they give full medical disclosure and they are allowed to add or correct any details on their application.

The Insurance Company may then re-evaluate the risk and if it is thought to be increased the monthly payments will probably be increased – which appears more reasonable and ultimately more satisfactory than paying the original premium then having a claim rejected because of non-disclosure of medical records.

This action should have been applied by the insurers a long time ago as the public’s concept of Protection Insurance has eroded by their somewhat strange approach. Without doubt, there is a great need for protection insurance so we can hope that it manages to reinstate faith and then the popularity it rightly deserves.  

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