Summary
The requirement for clarity and honesty when writing critical illness insurance policies. This article explains.

Very little is more harrowing in life than to be diagnosed with a chronic or critical condition. Concerns are made much worse when your insurance company notify you that they won’t pay up on your critical illness insurance or private health insurance for the HIV or cancer you are afflicited with.

You are told to study sub-clause five of paragraph 326 of the small print, which states that you have been diagnosed with the  wrong sort of cancer. Only tumours below the knee are covered and only the first five days of your treatment will be paid for, then it’s down to you to find the finance.

This state of affairs may sound ridiculous, but even though insurers and brokers are regulated, this type of procedure continues to carry on. It has been a slow process to clean up the industry and to make sure that consumers get a proper deal.

Just recently Cancer Backup, a well known charity, underlines this problem by organising a large assortment of  shopping surveys, which hightlighted some alarming facts about the private health insurance companies. It discovered that of all the leading insurance companies only HAS offered cover for cancer patients all through the period of their illness. Only the first part of the treatment is covered by the majority of health insurance policies. Care or treatment over a prolongedperiod, such as hormone replacement or chemotherapy is normally excluded.

Although brokers and insurers want to finance long term cover for insurance holders with life treatening illnesses, they won’t always point out to likely customers, at the time of signing up what they are covered for.

While both Macmillan Cancer Support and Cancer Backup have been in talks with similarorganisations within the industry to lift the standard of sales practices and make the wording of insurance documents much clearer, progress has been slow since the report was published two years ago.

Private health insurance and critical illness insurance cover  is usually taken out by people who are comparatively hale and hearty. Getting cancer is the last thing to cross their mind. That is why it is imperative to point out a policy’s exclusions before they sign up.

A report of best practice for insurance companies writing and selling medical insurance policies has been updated recently by the Association of British Insurers, which is a much needed step in the right direction.

The trade body has now advised that insurance companies and providers selling these types of insurance should set up typical case studies, which explain the circumstances when an insurance policy will or will not be paid. Regrettably insurers have no obligation to stick to this code, which is optional.

Although the  Association of British Insurers initiative is to be embraced, the best way of clarifying a policy is by getting the salesperson to clearly explain the small print.

In addition, industry terminology is in spite of everything even now being used by insurers to baffle the customer. For example it is wrong to grade cancer as an acute or chronic illness, deliberates Cancer Backup. However insurance companies are insistent that it should go in the acute category. Consumers are only informed about this when their claim is rejected.

Even though the  Association of British Insurers have their heart in the right place, the insurance companies can only be made to upgrade their standards by the regulator. Further training of call centre staff, who sell the majority of the policies, is also long overdue

More thorough sales procedures are crucial with terminology being eliminated. In the end it it is the duty of the insurersinsurance companies to make sure that their clients fully comprehend the terms of their insurance before they sign the document.

Bookmark It

Hide Sites