Critical Illness Cover is a type of insurance policy which pays a lump sum in the event of the holder being diagnosed with a life-threatening illness such as cancer, stroke or heart attack. The amount of cover is usually linked to a mortgage, whilst policies tend to be available in conjunction with Life Cover.
All policies include terms and conditions which should be read carefully and fully met.
Unfortunately, Critical Illness plans don’t pay out.
At least, that is the myth that certain sections of the media outlets like to peddle when writing sensationalist pieces. These stories have resulted in a skewed public opinion of Critical Illness Cover which has become far removed from the truth.
Data from Aviva shows that UK adults believe that only 48% of claims are successful. Staggeringly, up to 86% stated that they believe that insurers spend time and money trying to avoid paying out to entitled claimants.
Critical Illness Cover pays out more than you think
15,646 claims made on Critical Illness policies were successful in 2016, according to research from the Association of British insurers (ABI).
In 2016, an average of 92.2% of Critical Illness Claims were successful. Some leading Critical Illness Cover providers have published their results, including:
- Aegon 95%
- Vitality life 93%
- Legal & General 92.6%
- AIG 92.3%
- Royal London 92.2%
- LV= 92%
The number of failed claims is less than 10% of all insurance claims made each year, and the reasons for those claims being turned down tell a very different story to the one the press is pushing;
The two biggest reasons for failed claims are non-disclosure (e.g. not disclosing a medical treatment during application) and unmet criteria (such as the diagnosed illness not meeting the definition given in the policy), research from Aviva saw policy holders admit that they:
- Have not read the details of their policy (53%)
- Only read the terms of their policy when they needed to make a claim (54%)
- Do not think that supplying incorrect height and weight information affects their policy (45%)
- Do not think that lying about smoking and alcohol habits affects their policy (25%)
- Have given false information on their application (26%)
- Have not accurately stated their family’s medical history (31%)
- Have been dishonest in insurance applications (33%)
This research shows that the success rate of Critical Illness claims can be improved, but it will take attention from the policy holders, applicants and claimants to do so, rather than resting the liability on the policy providers.
To make sure that you are getting the right cover and increase your chances of claiming successfully, should you need to, follow these three steps:
Find the right policy: Compare all of the details given for available plans. Price alone is not a good factor on which to base your decisions, so check all details carefully and seek professional help and advice, if you need it.
Be honest: Giving accurate information now will make the success of future claims much more likely. Do not be tempted to lie about your habits or dimensions, as any disparity later will only cause you to lose out on an otherwise valid claim.
Don’t keep quiet: If there are any details that are not required on an application form, mention it to an adviser when you get the chance. It is far better to overshare unnecessary details than accidentally miss something which turns out to be vital when you need to make a claim.
To discuss your options and find out more about Critical Illness Cover, contact us on 0800 612 8099.