Insurance Companies Improve Protection Insurance
Summary
In this article we explain how Protection Insurance may become more popular with the life insurance companies at long last making positive steps that could with any luck be successful.
Most specialist financial advisors would be of the same opinion that Protection Insurance is fundamental 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 Cover 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 percentage of other Protection Insurance policies, do not do not have equivalent reputable qualities and have been branded as being miss-sold. furthermore, based on what we are now aware, critical illness cover has suffered as a result of astonishing exclusions from policies making it feasible for insurance companies to reject a claim even if it is genuine.
However, a little faith was restored when Norwich Union reported on the conclusion of claims on Critical Illness Cover on their 1/2 yearly figures.
Critical Illness claims were being rejected because people did not divulge their complete medical background. As a result Standard Life says that in the last six months the amount of declined claims has reduced significantly from 6.7% in the last year, to 2.3 per cent.
Why? We think, not simply Legal and General but all of the insurers, because of negative public relations, have been placed in a situation whereby they must reduce the number of claims that are rejected. Does this show how influential the media can be? Debateable perhaps – you may think we are cynical but we think there are other factors that urged the insurers to make modifications. Lately, as a consequence of bad press, sales of Critical Illness Insurance policies have dropped which in turn has clearly influenced the insurance company’s profit. This is more likely to have been the catalyst to promote change!
Norwich Union, Scottish Provident, Axa and Friends Provident have initiated some prominent alterations specially created to reduce their rejection rates. To start with, they silhouette plainly that all health disclosure, however trivial a visit to a Doctor might have been, must be includedmade known. Scottish Provident, among others will get a medically trained person to telephone every candidate to discuss all the details of their medical record. If the insurance policy then goes on risk, some policyholders are being informed that it is vital that they give complete medical disclosure and they are permitted to add or put right any details on their application document.
The Insurance Company may then reconsider the risk and if it is thought to be increased the monthly payments will probably be raised – which looks more reasonable and ultimately more satisfactory than paying the original premium then having a claim rejected due to non-disclosure of medical history.
This action should have been applied by the insurers a long time ago as the public’s perception of Protection life Insurance has deteriorated by their somewhat strange approach. On a positive note, there is a great need for protection insurance so we can hope that it is able to restore faith and then the popularity it rightly merits.