Critical illness cover (merged)

Robwalsh3

Whats the best for 2 thirty something non smokers who have two little darlings at home with regard to taking out critical illness cover and extra life assurance. Thanks in advance

dunstonh

Cannot be answered. You would get a different response on a week by week basis. It would also vary depending on sum assured, ages, term, level of cover (ie. guaranteed or reviewable, comprehensive or core conditions only or budget) and occupation.

dunstonh

Self advertising again (repeat offender) - reported as spam

dunstonh

21 of your 23 posts made link to 3 companies which are all part of the same group.

payless

Guess we have seen in past via different user names as well

Martin does mention, but does also warn that things are not clear

i

dunstonh

Have you checked out the terms and conditions of their price match guarantee? It virtually rules out any chance of getting a price match reduction.

Disgraceful advertising techniques and marketing gimmicks.

OshayAway

LeeJ wrote:

I wonder what an Insurer's reaction would be to a proposal which actually did include a full copy of an applicant's medical record? I wonder if they would actually prepare a proposal based upon that?

Has anyone (or does anyone know anyone) who has actually done just that? ie sent in a proposal for CI (or even Life or Medical Insurance) and enclosed their full medical records? If so I would love to know what happened - particularly if the applicant was the wrong side of 45.

The situation really isn't quite as bleak as many seem to think. It is true that the number one reason for Insurer's not paying out is non-disclosure on application forms. ( I'm going to play devil's advocate now!)The insurance companies do have to protect their own intrests and protect themselves from fraudulant claims. Most publish statistics on the percentage of claims refused either due to conditions not being met or non non disclosure of material facts. It's not very high. I have seen reports of high numbers of individuals working in the medical field claiming on critical illness policies very shortly after having taken them out.

So the need for viliglance on the part of the insurer is obvious. Also consider that if Insurers were not so cautious and paid out much more often for cases that strictly speaking did not qualify, what effect do you think that would have on premiums?

The 'golden rule' when completing any life or critical illness application is this, if in doubt whether to mention something or not - mention it, and give as much information as possible. If you really can't rely on your memory you can ask your broker to request that the insurer write out for all medical history. Then you know you have covered all your bases.

OshayAway

dunstonh wrote:

Reviewable is cheaper but it does mean that 5 years down the road, the insurance company can remove things from cover or increase your premiums.

I think you may be confusing Reviewable with Renewable. Easily done as they do sound similar.

Typically, reviews are carried out either every 5 years or every year after the first 5 years. At the time of review, the only thing that the insurer can change is the premium, and then only based on industry claims experience and expected future claims. The individual's state of health is not considered. For brand new applications, critical illness definitions and conditions change generally for the worse (which is why you have to be vary careful when replacing existing critical illness cover). However, these changes do not affect existing policies at point of review.

e.g. John Smith took out a Reviewable critical illness policy 5 years ago. His review comes up and there have been no increases in claims for the number of policies, his health has deteriorated and he has taken up motorcycle racing and a new job on an off-shore oil rig. Since he took out the policy the insurer has removed cover for angioplasty (most have).

In this case, there would be no change to his level of cover, monthly premiums or definitions. Changes to what is covered only applies to new applications.

Don't get me wrong, I totally agree that Guaranteed premium policies are best, however insurers continue to price it out of the reach of many (some insurers have stopped offering Guaranteed critical illness policies altogether) and even those that can, often cant justify the extra cost.

There is a lot of speculation about what will happen when policies are reviewed. Many insurers have not had Reviewable products available for 5 years yet so no reviews have taken place. The thing to remember is that only claims experience can effect it. The worry is that with the increase of things like childhood obesity and possible future CJD cases, that there could be on 'explosion' in claims. By the same stretch, advances in medical science for prevention of serious illnesses could bring the number of claims down and Reviewable premiums would follow. Nobody knows, and there is no right answer.

So always compare the cost of guaranteed premiums and if you can justify / afford it, then go for it. But don't be pressured / scared into it and don't be made to feel that there is no point having any cover unless you choose guaranteed.

dunstonh

I think you may be confusing Reviewable with Renewable. Easily done as they do sound similar.

No. I am referring to reviewable.

Typically, reviews are carried out either every 5 years or every year after the first 5 years. At the time of review, the only thing that the insurer can change is the premium, and then only based on industry claims experience and expected future claims. The individual's state of health is not considered.

Correct that the health (and any changes that may have occured to health) are not considered. However, the providers can also remove items or add exclusions if they desire. This appears to vary across the providers though. They majority do state they will review premiums.

However, not too long back I came across a couple of older Scottish Widows policies that had exclusions added on the review date to match the exclusions issued on their new plans. Hence why i mentioned cover and premium. Prior to coming across those, I would have just stated reviewable rates as well. Now when talking in generic terms, I prefer to be more cautious and say check both.

You can of course get renewable in addition to reviewable and guaranteed with a few providers.

OshayAway

dunstonh wrote:

However, not too long back I came across a couple of older Scottish Widows policies that had exclusions added on the review date to match the exclusions issued on their new plans. Hence why i mentioned cover and premium. Prior to coming across those, I would have just stated reviewable rates as well. Now when talking in generic terms, I prefer to be more cautious and say check both.

Very interesting! Not wishing to argue with you and I must say that I agree with most of your points but this issue is one I am interested in because in my experience many indivuals misunderstand how reviewable policies actually work.

Could I be so bold as to suggest that you double check the example you state. Scottish Widows key facts document and policy conditions booklet only reffer to the premium when commenting on policy reviews (it is true that many insurers go even further by stating that definitions or quality of cover will not change).

Just to confirm I have spoken to the Scottish Widows technical support team who verbally confirmed the same, they also went on to tell me that they have had reviewable critical illness policies since 1998 and to date they have not even made any changes (increases or decreases) to reveiwable policies premiums that have had reviews already. Although they did conceed that the 'policy conditions' only comments on the premium, they also explained that when a policy goes into force, the current policy conditions and definitions make up their part of the contract and can not be altered. If confirmation is required in writing, they suggested that they question be raised via the 'contact us' section of the Scottish Widows website.

If I am wrong, I'm happy to hold my hand up, but everything I have read and been told by insurers backs-up my understanding of this subject that only premuims can be reviewed and then only as a result of past claims expereince.

The only thing that I can think of for exclusions changing is when an individual informs of additional information very shortly after a policy has gone into force that was ommited in the first instance, that increases the risk they pose. In those cases, policies are passed back to underwriting and sometimes the terms offered can be withdrawn and reissued with a different decision. But this is very rare and the provision is made only at the very start of the policy.