Dump the critical illness?

mamaq

Hello,

I'm hoping to get some observations on my situation and perhaps people's own experiences and choices.

Both my wife and I have had CI policies to cover the mortgage payments for over 10 years, spending around 100GBP per month. So I think we've paid out a fair old whack of cash which could have gone straight onto the mortgage by now. These policies are from a reputable insurer (Scottish Provident), bought through an IFA but still have plenty of exclusions and potential get-outs, I think.

The motivation for this is concerns that my employer doesn't have very good provision for sickness pay. With money getting tighter all the time, I'm considering whether these policies remain desirable or whether the money might be better used on some for of income protection. My thinking is to cancel the CIs, take out IP, save money and get a more practical cover.

Does anyone have any thoughts/observations? Anyone made a similar decision?

Thanks in advance

mamaq

dunstonh

These policies are from a reputable insurer (Scottish Provident), bought through an IFA but still have plenty of exclusions and potential get-outs, I think.

They dont have that many get outs. They specify exactly what they cover. The claims payout rate on these plans is in the 90-95% range so they are not rejecting many.

My thinking is to cancel the CIs, take out IP, save money and get a more practical cover.

Permanent Health Insurance (PHI) is very different to CI. It will provide a payout in a greater range of areas but obviously if you suffer a CI claimable event then the CI will pay out a much larger amount.

As you never know when you may have a claimable event, it's really impossible for us to guide you. i.e. if we tell you to change it and 6 weeks later you have claimable event then you wont be covered for it and you will blame the forums. That said, I would personally prioritise PHI cover ahead of CI cover. Just make sure you dont get PPI versions of income protection.

Derwin

hi guys,,,
I have read your whole case.In my view the IC is not sufficent for boht of you.AS your employer doesn't have very good provision for sickness pay so i advice you to better switch over to a new affordable health insurance plan.

OshayAway

Derwin wrote: »

hi guys,,,
I have read your whole case.In my view the IC is not sufficent for boht of you.AS your employer doesn't have very good provision for sickness pay so i advice you to better switch over to a new affordable health insurance plan.

Quality advice! Oh, hang on, Americans don't get sarcasm do they?

forgotmyname

Think hard and look into all the aspects,I have been off work now for 4 years. But in the past 3 years i have
had 2 close friends become seriously ill, Motor neurone disease and cancer. Its just a waiting game, Neither
of them will get better.

ellie43

I have first hand experience of claiming CI with Scottish Provident. After fighting for over 5 years they finally paid up but not before my health deteriorated further due to the stress and I got a specialist solicitor involved.

In my experience Scottish Provident are not reputable. They both deliberately misled me and lied to me (I have documentary evidence obtained under the DPA where they admitted this).

Scottish Provident refused to tell me:
1) What in their opinion my diagnosis was (important as it affects treatment options). Their 'expert' diagnosed a different condtion, contrary to all the other consultants opinions.

2) What medical evidence they would accept as meeting the terms and conditions of the policy - would you take out a policy if when you come to claim your insurer won't tell you what information is needed to satisfy the claim?

3) They manufactured 'co-conditions' which they said also required treatment. One was depression - despite the fact that I had sent them a report from a consultant psychiatrist stating that I had no mental health problems whatsoever, and the second was obesity (no evidence at all for this - I weigh less than 8 stone and always have)

4) Ignored the fact that I had already undertaken the 'treatments' that they insisted I have

I provided them with 3 specialist consultants reports all of whom agreed on diagnosis, functioning and prognosis. But SP said these reports weren't impartial as I had paid for 2 of them. They had no such qualms about the opinions they obtained from their CMO who never even saw me in person or their so called 'independent expert'.

I have spoken to many people who have had similar problems both with IP and CI. Don't expect an automatic payout if you become ill and be prepared to be put under surveillance.

Have a look at my posts at the beginning of last year for a bit more info. I wouldn't touch SP with a bargepole. They had no interest in what was fair, they were determined not to pay out whatever evidence I submitted. It was only when their legal team reviewed the case and saw that I had a solicitor involved that they paid up, as they didn't think the case was worth pursuing on a 'cost - benefit' basis.

SP hope you will give up as I am sure many genuine claimants do, and who don't have the financial or emotional resources to counter their tactics.

A lot does depend on what your diagnosis is, but be prepared for 'dirty tactics' if you are unlucky enough to fall ill with something that insurers think they can dispute.

shelly42

ellie43 wrote: »

I have spoken to many people who have had similar problems both with IP and CI. Don't expect an automatic payout if you become ill and be prepared to be put under surveillance.

A lot does depend on what your diagnosis is, but be prepared for 'dirty tactics' if you are unlucky enough to fall ill with something that insurers think they can dispute.

Whilst I'm not in any way doubting what you are saying, people need to appreciate this is only one side of the argument. There is a lot of negative publicity about claims not being paid but very little praise for the amount that are paid.

The industry average for CIC payouts is between 91-95% so a lot of people find this type of cover incredibly beneficial.

Btw, I don't work for Scot Prov either before you say I do.

ellie43

Looking at your previous posts though, it would seem that you are 'pro-insurer'.

And why should insurers be praised for paying out on their contractual agreements? I don't recall ever hearing insurers 'praise' a claimant for paying their premiums which is their half of the contractual agreement!!

Whatever the stats (which of course can be manipulated) there is no justification whatsoever for the way that I was treated by my insurance company. What happened was a deliberate policy carried out over 5 years, not a one-off error made by one employee. My experience is by no means unique and it is important that people considering taking out or continuing with policies know all the facts.

Actually there isn't as much publicity as there could be surrounding poor practice because insurers often include 'gagging clauses' as part of their condition for payout. Also as far as IP is concerned - claimants are less likely to complain if they finally get their claim admitted as the payments are ongoing.

The insurance industry is cut-throat and merciless. You only have to look at a company like Unum http://www.lawyersandsettlements.com/case/first_unum.html
who operate in the UK too and have played a role in shaping welfare reform at the DWP.

As I discovered to my cost there is no body in the UK which regulates the way insurers manage their claims. The FSA is not interested in individual cases, and the FOS is only interested in the merits of the decision, not the behaviour of the insurer. (And of course there are many staff who used to work in the insurance industry who now work at the FOS). The ABI promotes the interests of insurers, not policyholders.

Every time I see someone from the ABI on tv they quote how many millions they pay out in claims each day. But when asked how much they take in premiums each day they never seem to have the info to hand.....I wonder why?

shelly42 wrote: »

Whilst I'm not in any way doubting what you are saying, people need to appreciate this is only one side of the argument. There is a lot of negative publicity about claims not being paid but very little praise for the amount that are paid.

The industry average for CIC payouts is between 91-95% so a lot of people find this type of cover incredibly beneficial.

Btw, I don't work for Scot Prov either before you say I do.

dunstonh

Looking at your previous posts though, it would seem that you are 'pro-insurer'.

Irrespective of Shelly's prior posts, the information is correct. Typically between 90-95% of claims are paid out. It used to be much lower in the past with figures not uncommon to be seen in the 70% range.

The insurance industry is cut-throat and merciless. You only have to look at a company like Unum http://www.lawyersandsettlements.com...irst_unum.html
who operate in the UK too and have played a role in shaping welfare reform at the DWP.

Irrelevant. That link is American and refers to US issues. The UK market is more regulated. (not that I am a fan of UNUM - mainly as they offer so many basic/budget plans that offer limited cover and clauses).

As I discovered to my cost there is no body in the UK which regulates the way insurers manage their claims.

Yes there is.

The FSA is not interested in individual cases, and the FOS is only interested in the merits of the decision, not the behaviour of the insurer.

The FSA quite rightly do not handle individual complaints. They do look at complaints though at corporate level when they do an inspection to look for trends or issues. The FOS do make recommendations and set figures on poor handling of cases by an insurer.

And of course there are many staff who used to work in the insurance industry who now work at the FOS

Evidence please?

The ABI promotes the interests of insurers, not policyholders.

Of course it does. That is what it is for.

Every time I see someone from the ABI on tv they quote how many millions they pay out in claims each day. But when asked how much they take in premiums each day they never seem to have the info to hand.....I wonder why?

I have never seen them asked how much they take in premiums each day and its not the sort of info once would have to hand. Its irrelevant to the subject anyway and doesn't matter.

There is no justification whatsoever for the way that I was treated by my insurance company. What happened was a deliberate policy carried out over 5 years, not a one-off error made by one employee. My experience is by no means unique and it is important that people considering taking out or continuing with policies know all the facts.

That is unfortunate but it is unusual. Sometimes you do get issues on borderline cases and that doesnt excuse them. Part of the problem is the adversarial system that exists with consumers and insurance companies. Neither side comes through that with their heads held high. However, the vast majority of people do not have those problems.

shelly42

ellie43 wrote: »

Looking at your previous posts though, it would seem that you are 'pro-insurer'.

I'm not necessarily "pro-insurer" like you say but I am "pro-offering a balanced argument".

ellie43 wrote: »

I don't recall ever hearing insurers 'praise' a claimant for paying their premiums which is their half of the contractual agreement!!

I don't recall ever hearing about a claimant who has grossly non disclosed material facts (and thus not held up their end of the contractual agreement) being slated in the same way some insurance companies are. (In no way whatsoever am I saying this is applicable in your case btw)

Whilst your experience does sound terrible, it's important to acknowledge that this type of cover can be extremely beneficial.

ellie43

dunstonh

The published stats may well be as you say, my point is that the stats can be manipulated.

You do not seem to be aware of the influence that Unum has in the UK - both at the DWP and underwriting employers policies. I was in contact with someone only last week whose employers insurance was provided by Unum. And this was in the UK.

Unum on their own website describe themselves on 4 March 2010 as

Unum, one of the UK’s leading providers of financial protection insurance,

http://www.unum.co.uk/Home/Corporate_Information/Press_Releases/2009/Unum_alerts_employers_to_fit_note_impact.htm

So my comments regarding the practices of Unum in the US are not irrelevant.

In my experience the FOS had no interest whatsoever in the way my claim was managed. They make 'recommendations' in some cases but that is all.

The FOS own website states

The Financial Ombudsman Service is not a regulator. Our role is not to:

• tell businesses what they should do to comply with the rules
• give legal advice on what rules mean or
• fine or punish businesses if rules are broken.

http://www.financial-ombudsman.org.uk/publications/guidance/telling-your-customers.htm

I have spoken to staff at the FOS who told me that they used to work for insurance companies and the FOS own websites show that there are ombudsmen who used to work in the insurance industry.
http://www.financial-ombudsman.org.uk/about/panel-ombudsmen.html

Perhaps you would be kind enough to tell me who does regulate the way insurers manage their claims? My financial advisor was unable to assist me on this point.

On BBC Breakfast programme last year an ABI rep was saying how much was paid out a day by insurers and he was asked the amount taken in premiums. The point is relevant because the amount paid out is meaningless if not put in context.

You have termed my experience 'unfortunate'. Had you lived through it for over 5 years you would realise that this is a gross understatement. Please do not attempt to belittle my experience. My health, already poor, has worsened as a result of the tactics of my insurer. That is something that you cannot put a price on.

You have assumed my case was 'borderline'. I obtained medical evidence from 3 different specialist consultants all of whom concurred on diagnosis, functioning and prognosis. One of the consultants was a NHS Clinical Champion in the field with over 20 years experience, the other two were on the Chief Medical Officers Working Group, one of whom practices from Harley Street. There is nothing 'borderline' about this.

Throughout the whole process my insurer refused to tell me what medical evidence they would accept.

They paid up in the end on the advice of their legal team who did finally acknowledge the importance of the medical reports and involvement of a solicitor. But claimants shouldn't have to employ a solicitor to ensure fair treatment by their insurer.

It maybe that most people do not have problems, but for those that do it is a significant issue. If someone wants to make an informed decision it is important that they know what can happen when things go wrong.