Summary
The requirement for precision and honesty when writing critical illness insurance plans. This article explains.
Very little is more disturbing in life than to be diagnosed with a chronic or critical condition. Things are made ten times worse when your insurance company informs you that they will not pay up on your critical illness insurance or private health cover for the HIV or cancer you are suffering from .
You are told to read sub-clause four of paragraph 327 of the small print, which tells you that you are suffering from the the wrong sort of cancer. Only tumours below the knee are covered and only the first five days of your treatment will be paid for, then it is up to you to find the money.
This situation may sound strange, although brokers and insurance companies are regulated, this type of system continues togo on. It has been a time-consuming process to clean up the industry and to make sure that clients get a fair deal.
A short time ago Cancer Backup, a well known charity, highlighted this predicament by arranging a large assortment of shopping surveys, which brought to light some worrying facts about the private health insurance industry. It found that of all the leading insurers only HAS gave cover for cancer patients all through the period of their illness. Only the initial treatment is covered by most of the health insurance companies. Care or treatment over a prolongedperiod, such as chemotherapy or hormone replacement is not normally included.
Even though insurers and brokers want to finance long term cover for insurance holders with life treatening illnesses, they won’t always make it clear to potential customers, at the time of taking out the policy what they are covered for.
While both Cancer Backup and Macmillan Cancer support have been in talks with similar organisations within the industry to lift the standard of sales practices and make the wording of policy documents clearer, since the report was published two years ago, progress has been slow.
Critical illness cover and private medical insurance is usually taken out by people who are relatively fit and healthy. Getting cancer is the last thing to cross their mind. That is why it is so essential to specify an insurance policy’s exclusions before they sign up.
A testimony of best practice for insurance companies writing and selling life cover has been revised recently by the Association of British Insurers, 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 set up typical case studies, which clarifies the circumstances when a policy will or won’t be paid. Unfortunately insurance providers have no obligation to adhere to this code, which is voluntary.
Although the Association of British Insurers initiative is to be embraced, the best way of amplifying a policy is by getting the salesperson to clearly explain the small print.
Furthermore, industry jargon is in spite of everything even now being used by insurers to bewilder the consumer. For instance it is wrong to grade cancer as an acute or chronic illness, deliberates Cancer Backup. Nevertheless insurance companies are definite that it should go in the acute category. customers are only told about this when they make a claim.
Although the Association of British Insurers have got their attitude right, the insurers can only be required to upgrade their standards by the regulator. Much more detailed training of tele marketing staff, who sell the majority of the policies, is also long overdue
More precise marketing procedures are essential with terminology being removed. Ultimately it remains the responsibility of the insurersinsurance companies to ensure that their customers are fully aware of the terms of their insurance cover before they commit themselves.