Summary
The effect of advances in medical science on Critical Illness policies. The benefits afforded by reviewable insurances.

payments for Critical Illness Cover are escalating due to the rising amounts of claims and concern about medical developments in the foreseeable future. Once diagnosed with a life threatening illness, CIC pays you a tax free payout, which will help you financially if your illness prevents you from working.

 2 top insurance companies will be elevating the price of insurance shortly. Scottish Provident’s premium will increase by 19 to 27 per cent and that of Swiss Life by 22 per cent. These increases are small when compared with the 50 per cent imposed by BUPA and Friends Provident and the 63 per cent introduced by Scottish Equitable and Norwich Union. LV are still deciding what rise they will enforce next month.

The insurance companies are in uncertainty as advances in medical science aid patients to survive illnesses, which would have been life threatening only 12 years ago. The result of this sea alteration in medical insurance is that life insurance claims are decreasing whilst settlements on critical illness policies have witnessed a sudden rise. Therefore the cost of life cover is going down, whilst that of critical illness cover is growing rapidly.

In an effort to reduce the sharp rise in premiums, the Association of British Insurers has altered the circumstances under which insurance is made available for prostrate cancer and heart problems.

Many patients are now finding out that speedy detection of these illnesses results in longer life expectancy. The conditions under which CIC policies settle are being redefined. This development will help to decrease the number of claims and subsequently decelerate the rapidity at which payments are increasing. (For instance), critical illness cover will not pay out for skin cancer unless it is invasive)

Karl Peters of broker’s Click Compare says that critical illness policies currently cover illnesses, which are easier to detect and treat. Claims are therefore being paid out for non-life threatening conditions, which is not the point of the insurance
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A review of the conditions of many policies is probable in the foreseeable future. Critical Illness Insurance for diabetes is being removed by PPP, which leaves BUPA as the only insurer that includes this illness.

 Reviewable term assurance are now being provided by a growing number of insurers. Illnesses and pay outs covered by these policies are looked at every five years. A standard CIC is a guaranteed insurance, which runs for a set number of years. The payments remain the same whilst the cover is in force, which is usually the length of their home owner loan. On the other hand this kind of insurance is becoming more expensive.

The Group Director of Liverpool Victoria’s independent financial adviser division, Harrison Lloyd says that you have to pay for the assurance that a guaranteed insurance policy offers. He says that consumers are most likely to choose a renewable rather than a guaranteed policy as the build up in pricewidens. Whilst Aviva raises it’s Critical Illness Cover it is also launching a reviewable insurance therefore offering customer a choice. Royal London has withdrawn it’s guaranteed CIChave a guaranteed policy. He advises that if you do not already have insurance it would be a shrewed decision to take it out now,| before, any more changes are introduced.

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Filed under: Every Day Life

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