Critical Illness

dunstonh

dunstonh..you don't work for insurance company by any chance!!!

No I do not.

what about asking people who forked thousands of pounds on CI insurance and then got their claims thrown out for selly reasons...i still cant forget that guy on BBC watchdog who had to go back to work while on chemotherapy for testicular cancer because the insure res refused his claim...guess why?...he did not declare a kidney infection he had as a child (what a bunch of****)....i would not even remember if i had an infection 5 years ago let alone 30 or 40 years ago.

Watchdog were criticised over that programme and the FOS had to make a statement in the following days which showed that the stats used in the programme were incorrect and taken out of context giving an impression of a much greater number than it really was.

So, what about all those that have received payouts and who haven't had to worry about finances and their house being repossessed just because they had a heart attack?

The vast majority of CI claims pay out and the published stats back that up.

silverfoxuk

I'd suggest that saying CI insurance is a waste of money is too simplistic. Your needs will be different from the next person. You could work through scenarios to help you work out if you need CI and secondly if you can afford it. For example do you have a partner/family/dependents? Do you have a mortgage/other debts? Do you have an income? OK, now what would happen if your partner died? What if you died? Would you lose an income? Would there be financial cover to let the other partner give up work to look after the kid(s)? What if one of you didn't die but was so sick/ill that he/she couldn't work? Do you get sick pay from your employer? If so how long will it last for? What happens when it runs out? Income protection/PHI should cover you if you are so ill or sick that you can carry out your job. So IP will pay out in some similar circumastances to CI if you illness stops you from working.

If you have both life insurance and income protection insurance, these both are what you could call 'catastrophe cover'. ie if you didn't have these in place and you have dependents, a death or loss of income of an earner could be quite catastrophic to your/their situation.

Critical illness I think is less important if you have life insurance and IP, but it will give you more options if you get a payout. An example would be if you need major heart surgery, you're off work for a few moths, but at the end of the year, the doc says, yes you could go back to work but don't overdoo it.

The insurance company paying your IP will be keen for you to go back to work if you can. And either way you will have an income either from working or from the IP insurer. However if you have CI that pays out because of the heart surgey, your mortgage & debts could be paid off leaving you with the option of saying "do I really need to go back to work full time or could I decide to retire/go part time/take a long holiday?"

A CI payout gives you more options but i'm not sure it's there to protect you from a catastrophe - there are more appropriate insurances for that. But CI is typically more expensive than life insurance or income protection insurance. Also (as was seen on Watchdog and in the recent Which? report) policy terms vary. Some policies are 'basic' ones, others more 'comprehensive'. Guess what? The more comprehensive ones are more expensive that the cheaper 'basic' ones. A good IFA will be up on policy terms.

Dunstonh writes elequently on these matters and if you type in 'pecking order' into the search box you'll get his views on where CI falls in the order of things

dunstonh

For those not used to using the search facility, The pecking order is life, PHI then CI. Mortgage payment protection comes next.

PHI should always be prioritised above CI but you will find a number that dont because they either do not have a PHI product to offer (tied agents dont have to offer what they dont have available), have a naff PHI product (Unum essential abilities plan comes to mind there which is often white lablled), or are just too lazy as PHI takes more work than CI and/or MPPI.

CI cover does come in budget and comprehensive levels (although providers dont refer to their versions as that).

bommer

I cancelled my mortgage critical illness policy last year after following martin's tips but as you think it never happens to you - unfortunately for the most healthyist it still does. I think sometimes we think we are invincible. I cancelled £56k of critical illness last year for £20K + £200K life policy. Unfortunately hubby now has cancer! at £61.25 sick pay per week we are now £365 down per week and £20k won't go as far as I thought it would it certainly makes you think. Considering how long it takes the DSS to pay out (at least 6 weeks).

Maid_of_Kent_3

I had CI as part of my mortgage plan with L&G. Had it for 10 years when I was diagnosed with breast cancer in May. They paid out, no quibble, including interest from the date of diagnosis to the date of payment. As a single person, it was a godsend that my mortgage is now paid off while I have a potentially life threatening illness and a long period of treatment

Gemklm

My husband has Critical Illness Cover but they are refusing to pay out quoting "A condition for which the insured had previously received investigation or treatment or which had previously been diagnosed, or of which they were aware, priro to the commencement of the Policy.

They state "that you first consulted with symptoms which relate to Motor Neurone Disease in May 2004. This initial consultation has later led to the diagnosis and finally the ongoing treatment of Motor Neurone Disease"

My husband first consulted with symptoms of twitching in muscles in his back on 1st October 2004. He has possibly verbally said to a Consultant that he first noticed symptoms around five months before, but there is no way at that time he would have known he had such a serious terminal illness.
Further to this he had a policy running with this company, Alico, from 2001. he was later contacted by a sales person in June 2004 who sold him a further policy. At this time he did not realise he already had a similar policy running. Three months down the line he noticed he had two direct debits coming out and got his bank to cancel one of them, the bank cancelled the older of the two policies. It seems that Alico have decided that as my husband took the policy out in June 2004 they are going by him verbally saying he first noticed symptoms in May 2004. Can they refuse paying out on the policy on such terms, or do we have a case to go to the FSA with a complaint? Or can we make a claim on the older of the policies, the one he took out in 2001 and cancelled in August 2004, prior to the bank cancelling the direct debit for it?

Any help and advice would be greatly received

Zabytrid

I was searching for info on a new elecy company and thought I'd have a wee look in the Life Assurance forum. As an underwriter and claims assessor for a major British insurer, I was compelled to register and air my thoughts on the subject.

Firstly, I'd like to say that insurance companies are not bar-stewards, our job is to pay valid claims and not as most people think, to nitt-pick every claim for some kind of non-disclosure. Good old Watchdog will broadcast whatever they like to make a good programme and I would argue that no company would void a policy for non-disclosed kidney infection. What you will find if you look deeper into that case, is that the 'kidney infection' as they called it, was probably a long history of renal problems which would have resulted in a significant increase in the chaps monthly premium (called a loading). Effectively this chap has been paying for a policy that should never have existed and the insurance company is entitled to refund all premiums and walk away. It seems harsh but it's life.

I always bring it back to the same old analagy. Say you insured your car and declared zero points on your licience. A year later you claim because the car was stolen. The insurance company is going to ask for evidence that you are who you say you are so they will ask for a copy of your licience. The insurance company then discovers the 9 penelty points on your licience for speeding and they void your policy and refund your premiums. Would you complain and say "hey, my car was stolen, this has nothing to do with the fact that I've been caught speeding before!!!" Of course not because we can clearly see that the car insurance policy should never have existed on the terms that it did.

I completely disagree PHI should come before CI cover. In my experience, the majority of PHI claims are over within 1 year. Add to that a likely defer period of 13, 26 or even 52 weeks (that is you will need to have been off work for a certain period of time before you can claim), it's likely that you will be back to work before you have received any major benefits. So imagine you have PHI and no CI cover. You are an office worker and you suffer cancer. You have the tumour removed followed by a 6 week course of chemo and radiotherapy. You are then able to go back to work after 6 months. In all this time, your PHI policy, which just happens to have a 26 week deferred period, has paid nothing. Alternatively, say you were off sick for a year and returned to work. In this case, you would effectively receive half your months salary for 6 months, and then nothing.
If you had had CI cover for your mortgage, then your mortgage would have been paid off, and you would have been mortgage free for the rest of your recuperation.
In my experience, claiming on a Critical Illness policy is easier and faster, than claiming on a PHI contract. For CI policies, if you have suffered from an illness that is covered under the policy wording, then you will be paid the full amount. For PHI contracts, you have to have been off work for the deferred period, you have to prove that medically you cannot do your own occupation or activities of daily living, AND you have to prove that you are earning nothing.

I would also warn everyone who is thinking of taking out a PHI contract, to consider carefully what benefits your employer gives you during sickness. For example, say your employer pays you full pay for 6 months then half pay for 6 months and you have a 4 week defer period on your PHI plan. You will need to be off sick for a whole year before you receive any benefit.

There's also the notion that CI is worthless cause it only covers you for a certain number of conditions. While this is true, there is a reason for this. Actuaries compile statistics on diseases and disorders and they will 'price' a policy with a combination of all the most comman conditions included. So if you are paying £30 per month for CI, this can be broken down into costs for each illness, eg £10 for cancer, £5 for heart disease £5 for stroke, £5 for MS and £5 for everything else. If you would expect a CI policy to cover any condition that you think is 'critical', then you would have to expect premiums to increase by 1000%. I'd also say that the person who says that 'we' only cover certain cancers, is incorrect. We will cover any cancer that meets a certain level of malignancy, and believe me that level is very low indeed. So statisically you are likely to suffer from one of the 4 major conditions, cancer, heart disease, stroke or MS. Most policies also cover another 30 conditions such as transplant, paralysis, motor-neurone, parkinsons, alzheimer's etc. I think the main problem with CI cover is that the consumer only ever hears of the bad press, not the majority of the good stories that come out of CI cover - we need more people like Maid of Kent to speak up for the industry!

I'm very sorry to here about your husband Gemkln. The first thing I can say is that I would not have voided your husband's policy unless I was 100% sure I could stand up in court and defend my decision. Any decent claims assessor should have done the same. I assume that your husband failed to disclose his muscle twitching on the application form. What the insurance company should have done is send you a letter detailing exactly where he should have disclosed this information. In your husband's case, it would have to be a pretty black and white question such as "Have you suffered any conditions about which you intend to seak medical advice" or "Have you ever suffered any muscular twitching". You then need to consider what your husband 'should' have answered on the form ie '5 month history of twitching in back muscles'. I would look at the insurers letter carefully and see how concrete you think their arguement is. If for example the question asks "Are you suffering from any condition you have not already told us about?" and your husband answered No, then the insurer's arguement is very weak. What I can say however, is that there is nothing whatsoever stopping you from going to the Financial Services Ombidsmund with an appeal (I don't like to use the word complaint). I would suggest you read the insurer's letter and then present your appeal to FOS with the reasons you think it is unfair. FOS are likely to rule infavour of the customer if they think there is any doubt in the insurers arguement or the decision was completely against the spirit of the policy.

You won't be able to claim on the old policy because you cancelled that and you would need to 'reinstate' that old policy, which would mean the insurer would ask about your husband's current state of health.

Good luck and all the best.