Summary
The necessity for clarity and truthfulness when writing critical illness insurance policies. This article explains.
Very little is more upsetting in life than to be diagnosed with a chronic or critical illness. Matters are made a thousand times worse when your insurance company informs you that they won’t pay up on your critical illness policy or private medical insurance for the Cancer or HIV you are afflicited with.
You are asked to read sub-clause five of paragraph 326 of the small print, which informs you that you have been diagnosed with the wrong form of cancer. Only tumours below the knee are covered and only the first five days of your treatment will be paid for, then it is up to you to find the money.
This situation may sound strange, but in spite of brokers and insurers being regulated, this type of practice continues to carry on. It has been a time-consuming process to tidy up the industry and to ensure consumers get a fair deal and get the cheapest mortgage life cover.
A short time ago Cancer Backup, a well known charity, underlines this predicament by organising a huge array of mystery shopping surveys, which hightlighted some disconcerting facts about the private health insurance industry. It established that of most of the leading insurers only BUPA offered cover for cancer patients throughout the duration of their illness. Only immediate treatment is covered by the majority of health insurance policies. Treatment or care over a long period, such as hormone replacement or chemotherapy is not normally included.
While insurance companies and brokers want to finance long term cover for policyholders with chronic illnesses, they won’t always make it clear to potential clients, at the time of taking out the policy what they are covered for. And they will want quotes for cheap life insurance.
While both Cancer Backup and Macmillan Cancer support have been in consultation with comparable establishments within the industry to lift the standard of sales practices and make the phrasing of policy documents much clearer, since the report was published two years ago, progress has been slow.
Private medical insurance, life insurance and critical illness cover is normally taken out by people who are quite fit and healthy. The last thing that crosses their minds is getting cancer. That is why it is so essential to point out a policy’s exclusions before they sign up.
A testimony of best practice for companies writing and selling medical insurance policies has been updated recently by the ABI, which is a much needed step in the proper direction.
The trade body has now proposed that insurers and providers selling these kinds of insurance should prepare typical case studies, which explicates the circumstances when an insurance policy will or will not be paid. Alas insurance companies have no obligation to adhere to this code, which is voluntary.
Even though the Association of British Insurers initiative is to be embraced, the best way of amplifying a policy is by getting the salesperson to explain the small print.
Then again, industry terminology is in spite of everything still being employed by insurers to confuse the consumer. For example it is wrong to classify cancer as an acute or chronic illness, deliberates Cancer Backup. Nevertheless insurance companies are insistent that it should go in the acute category. clients only hear about this when their claim is rejected.
Even though the Association of British Insurers have got their attitude right, the insurers can only be made to better their principles by the regulator. Further training of tele sales staff, who sell the majority of the policies, is also long overdue.
More precise marketing procedures are required with terminology being eliminated. Ultimately it falls upon the insurersinsurance companies to make sure that their customers fully comprehend the terms of their insurance cover before they sign the document.