September 27th, 2009 by admin

Summary
The outcome of developments in medical science on Critical Illness policies. The payback afforded by reviewable policies.

payments for critical illness are escalating due to the rising number of claims and apprehension about medical improvements in the foreseeable future. As soon as you are diagnosed with a life threatening illness, Critical Illness Insurance pays you a tax free lump sum, which will help you financially if you are off work due to illness.

 Two top insurance companies will be increasing the cost of insurance soon. Scottish Provident’s payment will rise by 20 to 26 per cent and that of Standard Life by 19 per cent. These increases are small when compared with the 54 per cent imposed by Friends Provident and BUPA and the 60 per cent introduced by Norwich Union and Scottish Equitable. Liverpool Victoria are still deciding what increase they will impose next month.

The insurance market is in turmoil as developments in medical science assist patients to survive illnesses, which would have been terminal only 11 years ago. The effect of this sea alteration in medical insurance is that life insurance claims are decreasing whilst pay outs on critical illness policies have observed a sudden rise. Therefore the cost of life insurance is dropping, whilst that of critical illness insurance is rising rapidly.

In an effort to reduce the sharp rise in premiums, the AIB has changed the conditions under which insurance is made available for prostrate cancer and heart problems.

Many sufferers are now finding out that early recognition of these conditions results in extended life expectancy. The conditions under which CIC policies make a pay out are being redefined. This change will help to reduce the number of claims and therefore decelerate the speed at which premiums are rising. (For example), critical illness cover will not pay out for skin cancer unless it is invasive)

Jim Young of broker’s Click Compare says that critical illness policies at present cover illnesses, which are easier to detect and treat. Claims are consequently being paid out for non-life threatening illnesses, which is not the point of the insurance
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An appraisal of the conditions of many policies is likely in the foreseeable future. CIC for diabetes is being removed by Standard Life, which leaves Norwich Union as the only insurer that includes this illness.

 Reviewable life assurance are now being given by a growing number of insurers. conditions and premiums covered by these insurances are revised every few years. A classic Critical Illness Cover is a cast iron policy, which carries on for a specif number of years. The payments stay the same whilst the insurance is in place, which is normally the length of their mortgage. On the other hand this kind of cover is becoming more expensive.

The Group Director of LV’s independent financial adviser division, Justin Myers says that you have to pay for the reassurance that a guaranteed policy supplies. He adds that customers are most likely to want a renewable rather than a guaranteed policy as the increase in pricewidens. While Scottish Provident raises it’s Critical Illness Cover it is also launching a reviewable policy thus offering customer a choice. Skandia has removed it’s guaranteed Critical Illness Coverhave a guaranteed insurance policy. He recommends that if you do not by now have cover it would be wise to take it out post haste,| prior to any more changes being announced.

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