The insurance policy that could prove critical

Some people might be put off buying a critical illness policy because they believe it’s unlikely to pay out, despite the proportion of claims paid by insurers standing at just over 92%.

So why is there such a gap between perception and reality among consumers?

There have been well-publicised stories in the past where a policyholder has had a claim refused because their circumstances didn’t meet the insurer’s terms and conditions. But in reality, the number of critical illness claims declined are actually a tiny minority compared to the total paid out. Take a look at these numbers of critical illness claims paid from 2017 from some of the UK’s leading insurers:

  • Aviva 93%
  • Zurich 95%
  • Vitality 92%
  • Legal and General 92%
  • LV= 89%

Reasons why an insurer may not pay a claim:

  • The policyholder didn’t inform the provider about important medical or health information when they took out the policy
  • The condition claimed for didn’t meet the definition within the plan
  • The policyholder tried to claim for conditions that were excluded from their plan

Separating fact from fiction

A critical illness policy pays out a tax free lump sum on diagnosis for any of the specified serious illnesses – around 100, including cancer, heart attack or stroke.

There are additional benefits available with these policies which can be life- changing when called upon.

The cover might seem costly; a policy from Aviva for a 35-year-old non-smoker needing £200,000 cover over 25 years would cost £64 a month and it gets more as you get older but the value of this type of protection makes it absolutely worth considering.

In fact, the Association of British Insurers reported that a total of 96% of critical illness claims made for cancer were paid out across the industry, demonstrating the positive impact these products can have during the worst of times.

The insurance market can be complex and confusing. Price comparison sites can make it easier to search and compare critical illness policies, but there’s such a large choice and variety of products and you might end up paying for something that doesn’t quite fit your circumstances.

Don’t leave it to chance, seek professional, face-to-face advice from someone who will get to know your circumstances, your family history and your likely protection requirements and recommend critical illness cover that’s right for you.

If you’d like to know more about how we can help you arrange serious or critical illness cover, or you’d like a better understanding of the options available, please get in touch.