Not many of us are covered against serious illness even though it may appear at anytime. Standard Life, the income protection provider, has carried out research that reveals only 4.2 per cent of the country’s work force have critical illness insurance, even though they will receive a lump sum if they have a heart attack, stroke or suffer from cancer.
17% of the population think the insurance to be too dear, the survey reveals, which which accounts for the low take up.
Would-be customers are also puzzled by the phrasing of policies and the disparity between permanent medical cover and critical illness insurance.
A working party formed by the AIB, is a present reviewing the phraseology of policies. The situation could become even more puzzling if the working party choose to lessen the amount of illnesses defined as a critical illness.
Norwich Union have launched a new plan known as Elixia 123, which it claims cuts the cost of critical illness cover by around 29 per cent and on occasions by as much as 50 per cent.
This will be achieved by permitting clients to pick the illnesses for which they want insurance. There are three categories of risk. Group 1. Invasive cancer, strokes and heart attacks. The insurance will only make a settlement if the disease is life threatening or leads to major life style changes.
Category 2. illnessesthat significantly affect life style but do not have much impact on life expectancy. Blindness, motor neurione disease and Alzheimer’s are incorporated in this category.
roup three. enough about critical illness to decide between the three levels of cover. This is definitely the view of Miss F Price of independent financial advisers T Thatchers and Sons. She thinks lettingclients choose maybe risky as there is a large amount of terminology in an insurance policy and the medical terms are difficult to understand. She counsels clients to choose the most comprehensive insurance as one is unable to foresee the future. Choose a lump sum payment equivalent to your mortgage is her advice.
Critical illness insurance is not that expensive so it is prudent to opt for a comprehensive policy, which will give you peace of mind.
Nye Jones, the distribution development manager at PruHealth, is concerned about how the terms are defined. She emphasises that customers must comprehend exactly what they are buying. For instance, when is a condition defined as major? The first and the third categories need elaboration before buying cover as there is not much to choose between them in her view. Problems can happen later if the client has not fully comprehended the terms of the policy when they Jennifer Green.