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Guiding consumers through the CI maze

This year seems to have been a rollercoaster ride for protection. Critical illness insurance was once again given a bashing in the consumer press, because of a claim that wasn’t paid due to non-disclosure.

At the point of claim, it was discovered that the policyholder had not disclosed the fact that he had been referred to a dermatologist two months prior to his application. As he decided not to attend the appointment because he felt his ailment was insignificant, he didn’t think it was necessary to disclose the information. The details of the case are unclear, and there is no indication as to whether the original ailment was linked to the eventual problem (skin cancer). However, this seems to be yet another example of people not understanding what information they need to provide.

It is so easy for situations such as this to switch people off protection, but we all have a duty to make sure this doesn’t happen. We need to focus on the tens of thousands of people whose lives have been made financially secure by the 1.6bn paid out in claims, and the many lives that will be helped in the future.

We need to keep remembering to encourage all applicants to fill in the application form fully, carefully and to the best of their knowledge. You should never get bored of saying this, as it could mean the difference between their policy paying out or not. The press article also included information on declined claims data from a number of providers. It is good to see such transparency is now becoming standard practice.

Providing people with information on why a claim would be declined can help them avoid such a situation. However, it is worrying to see the statistics being used in what was effectively a league table, as there is no industry standard on how claims should be recorded. The figures might not be comparable.

What we need to remember is that the majority of declined claims occur because they don’t meet the definition or because of non-disclosure. We recognise this problem and a lot of work is being done at all levels to try and stop this happening. For example, the Association Of British Insurers has been working on application forms’ clarity. Its Critical Illness Working Party is looking at making critical illness definitions more descriptive as part of its wider review. Individual providers are giving guidance on how intermediaries can ensure their clients help themselves.

No company wants to turn down claims, which is why we are all working together at an industry level to make sure it is minimised. All the changes being made cannot fail to make a huge difference to the declined claims data going forward. This in turn will make a big difference to many more lives.


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