The Imperial Cancer Research Fund estimated that at least one third of British citizens would be diagnosed with cancer by 1999. Although the odds of surviving a major illness have improved, the life-altering consequences of such an illness remain.
Insurance policies for critical illness are designed to assist you with any changes that may be required if you are diagnosed with a “qualifying condition”. Many policies will pay out if you are diagnosed with a variety of conditions, including heart disease, stroke, cancer, stroke and renal failure. A one-off, tax-free payment is usually available to help you with expenses. This could include the cost of adapting your home or car, or retraining for a new occupation. This type of coverage is not just for the breadwinner. You should also consider child care and housekeeping costs if Mum is unable to work.
Unfortunately, families and individuals may discover more disturbing news at a time when they are reeling from the shock of being diagnosed with a critical illness. According to the latest statistics from the insurance industry, 25% of all claims are denied!
The insurance company will ask for a lot of information from you as soon as you file a claim. Most likely, much of the information requested is irrelevant to the claim. This information is used by the insurer to determine if the insured was truthful in their original insurance application.
This is called non-disclosure by the insurance companies. If any medical information has been left out, this can be used to deny the claim.
The non-disclosure might not have been related to the critical illness. There have been a variety of reasons why claims were turned down, including the rejection of a case involving a woman diagnosed with breast cancer. She had not listed treatment for depression in her original proposal.
These are the rejection rates:
Rejected claims by companies: %
Scottish Equitable Project 28%
Norwich Union 26%
Friends Provident 25
22% for Legal and General
Standard Life 20%
Scottish Widows 18%
Scottish Provident 11%
Scottish Equitable Guardian 10%
The insurers insist that the rejections are legal. However, the Law Commission seems to disagree. A consultation document was published recently. The Commission stated that it is possible for applicants to act reasonable and honestly while still failing to fulfill the duty to disclose. These consultations’ conclusions will be reported as soon as possible.
This insurance is very important. It is crucial that you declare all your previous illnesses when you apply for it. If you need to file a claim, your medical records will likely be examined thoroughly. In the event that the insurers believe you have omitted any medical information, they may deny the request.
Compare rates from different companies. Pay attention to the fine print. It is worth taking the time to list medical conditions. It may never happen.