Life Insurance Cover – ABC

Summary
During the “Credit Crunch” Protection Insurance has been a useful product, will it become more popular? The right moves are at last being made by the insurance market. We hope they will be successful. This article gives you the facts.

Not manyexpert financial advisers would disagree that protection insurance should be the basis of most peoples financial planning whether it be guarding against the damage of early death, accident, long term illness or (particularly now with the arrival of the credit crunch), cover for unemployment.

Life assurance is rightly the bed rock of financial planning whether it be put in place to protect your home owner loan or supply a tax free lump sum for your loved ones in the event of your death. Regrettably, some other brands of protection insurance have a less enviable reputation. Payment Protection Insurance Cover has a reputation for being miss-sold and critical illness cover has formally suffered from extensive policy exclusions which allowed the insurers to refuse a huge amount of claims, even if they seem valid.

But last month a shimmer of light emerged when Norwich Union gave out its 1st 1/2 figures on the resulteffect of claims on its critical illness cover. These figures appear to imply that at last the problem of inadvertent disclosure of health particulars when the policy application is completed, is being resolved.

A little while ago critical illness insurance claims were being repeatedly refused on the merest suggestion that the client had omitted any slight medical detail – even a foot infection or a sore throat! According to the figures presented by Legal and General, their claim refusals have come down sharply from 6.5% the previous year to 1.6 per cent in the last six months.

How did this come about? LV, Scottish Equitable, Norwich Union, Scottish Provident, Axa, and Friends Provident  have launched a range of changes intended to diminish their refusal rates. They start off with an absolutely clear explanation of the importance of complete health disclosure right down to when they last visited their Doctor no matter how minor the reason. And some life insurance quotes such as Axa get a medically trained person to phone each applicant to discuss their medical history in more detail. Then when the insurance policy goes on risk, some insurers are telling again the insurance holders of the importance of full health revelation and giving them the opportunity of correcting or adding the details on their application form.

If the additional details are assessed as increasing the insurer’s risk, then the cheapest life cover insurance company will certainlywithout doubt put up the monthly payment – but that’s definitely far better than paying the original payment for years and then getting a claim refused.

The insurance companies should have taken action years ago as their slowcoach approach has dented the people’s perception of protection insurance. Nonetheless there is an definite need for protection insurance so let us pray that it achieves the status its so correctly justifies.