Critical Illness Insurance - What exactly am I covered for?

The need for comprehensive Independent financial advice - what exactly am I covered for?

The Critical Illness Cover definitions used by critical illness insurance companies within plans have taken their lead from' The Association of British Insurers (ABI) critical illness working party in recent times. Standard wordings for the main conditions cancer, heart attack, stroke, kidney failure, multiple sclerosis and heart bypass surgery have led to a homogeneity amongst plans.  This has led to many health insurance advisers recommending to their client the cheapest critical illness insurance cover option. We believe this is not the way forward. Up to approximately 24 other critical illness conditions can exist within the contracts of the critical illness insurance companies we are able to recommend to our clients and the variation in wordings used by different critical illness insurance companies can be small but significant.

The wording of critical illness cover definitions will determine as to whether or not the claim is ultimately successful.

It is a fruitless exercise to choose critical illness cover on a cost factor basis only. It is not life assurance cover in its simplicity it requires a thoughtful time consuming decision making process where therefore top quality independent financial advice is required to choose a suitable critical illness insurance contract.

If you require only the "core conditions" to be included in your critical illness cover it is still not in our opinion the best strategy to simply go to your bank and choose possibly only the one contract on the table on the grounds of cost.

The superior critical illness insurance cover plan is always the one that will pay out a successful claim, and that should be borne in mind when comparing what is on offer from different critical illness insurance companies.

Example of "definition variation" in the event of a critical illness insurance cover claim.

The Association of British Insurers (ABI) model wording defines three criteria for a successful heart attack claim. All critical illness insurance companies are in agreement of this apart from 'Scottish Provident'. Scottish Provident has no requirement for chest pain. As recent heart attack studies have shown approximately 25% of all heart attacks are silent.

This is one example among many as to the importance and significance of considering what your critical illness insurance plan is actually covering you for.

A changing marketplace for critical illness insurance.

An improvement in diagnostic techniques has led to confusion among critical illness insurance companies as to what to change for contracts as actuaries have found it increasingly difficult to project future claims. The result has been two-fold.

  • Steadily rising premiums
  • A switch from guaranteed premiums to reviewable premiums for critical illness cover

With continuing advances in medical technology the impact of many illnesses is less serious than it once was, and the terms of critical illness cover need to take account of this. Angioplasty is a good example. Once associated with high risk complications, a patient can now spend just 24 hours in hospital and return to work within 7 to 10 days.

Screening techniques have also improved so that illnesses such as cervical cancer, breast cancer and prostate cancer can be diagnosed earlier and ultimately be treated successfully before they reach the critical stage.

Critical illness insurance companies are changing their products on a regular basis. This is where the knowledge and expertise of independent financial and health insurance advice can prove invaluable.

By David Ratcliffe at My Future Finance.

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