Summary
In this article we explain  how Protection Insurance may become more popular
with the insurance industry at long last making positive steps that should hopefully be successful.

A lot of professional  advisors would concurthat Protection Insurance is  crutial to the majority of families, either as a  precaution in the event of cover for an accident, loss of employment (especially in the present economic climate), prolonged illness or premature death.

Life Insurance Cover is the basis 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 Financial Protection Insurance policies, do not do not have similar reliable qualities and have been branded as being miss-sold.  Also, based on what we know, critical illness cover has suffered owing to startling omissions from life insurance policies making it possible for insurers to reject a claim even if it is genuine.

In spite of this, some confidence was reinstated when Standard Life reported on the conclusion of claims on Critical Illness policies on their 1/2 yearly statistics. 

Critical Illness Insurance claims were being declined because customers did not disclose their complete health record.  As a result Standard Life  reports that in the last 5 months the amount of declined claims has plunged significantly from 6.8 per cent in the last year, to 2.3%.

Why?  We think, not only Aviva but all of the insurers, because of destructive publicity, have been placed in a position whereby they must diminish the number of claims that are rejected. Does this confirm how influential the press can be?  Debateable perhaps – you may think we are doubtful but we believe there are other aspects that urged the insurance companies to make adjustments.  More recently, as a result of dire media, sales of Critical Illness policies  have declined which in turn has clearly affected the insurers profit. This was probably the catalyst that promoted the change!

Axa, Friends Provident, Norwich Union and Scottish Provident have introduced some major changes expressly created to decrease their rejection rates. To begin with, they outline plainly that all health disclosure, however trivial a visit to a Doctor might have been, must be revealed.  Scottish Provident, among others will get a medically trained person to telephone every applicant to discuss all the particulars of their medical record.  If the insurance policy then goes on risk, some policyholders are being reminded that it is vital that they give full medical disclosure and they are allowed to add or put right any information on their application document.

The insurer may then re-evaluate the risk and if it is believed to be increased the monthly payments will likely be increased – which looks more rational and eventually more satisfactory than paying the original payment then having a claim rejected as a result of non-disclosure of medical facts.

This action should have been taken by the Insurance Companies years ago as the public’s understanding of Protection Insurance has eroded by their somewhat strange approach. Without doubt, there is an obvious and essential need for protection insurance so we can hope that it is able to re-establish trust and then the recognition it rightly merits. 

The FSA regulate the Insurance markets within the UK