As More and More Patients Recover Critical Illness Premiums increase
The outcome of advances in medical science on Critical Illness insurance. The payback afforded by reviewable insurances.
Premiums for Critical Illness Cover are increasing due to the expanding amounts of claims and concern about medical advances in the foreseeable future. If you are diagnosed with a life threatening illness, Critical Illness Insurance gives you a tax free payout, which will help you financially if your illness prevents you from working.
2 top insurance companies will be increasing the price of cover soon. Aviva’s premium will rise by 20 to 25 per cent and that of Standard Life by 19 per cent. These rises are minute when compared with the 52 per cent imposed by BUPA and Friends Provident and the 61 per cent introduced by Norwich Union and Scottish Equitable. Liverpool Victoria are still deciding what increase they will impose next month.
The insurance industry is in turmoil as improvements in medical science help patients to survive serious conditions, which would have been life threatening only 10 years ago. The result of this huge change in medical insurance is that life insurance claims are decreasing whilst settlements on critical illness policies have seen a sharp increase. Therefore the cost of life cover is dropping, while that of critical illness cover is increasing rapidly.
In an effort to keep the price of premiums down, the Association of British Insurers has amended the conditions under which insurance is made available for prostrate cancer and heart problems.
Many patients are now discovering that early recognition of these illnesses results in longer life expectancy. The conditions under which CIC policies make a pay out are being redefined. This occurrence will help to reduce the amount of claims and subsequently slow down the rate at which premiums are increasing. (For example), critical illness insurance will not pay out for skin cancer unless it is invasive)
Freddie Harrrison of broker’s LifeSearch says that critical illness insurance policies at present cover conditions, which are simpler to diagnose and treat. Claims are therefore being settled for non-life threatening conditions, which is not the point of the policy
An evaluation of the terms of many policies is probable in the future. CIC for diabetes is being removed by Swiss Life, which leaves Friends Provident as the only insurer that incorporates this condition.
Reviewable life insurance cover are at present being given by an escalating amount of insurers. Illnesses and pay outs covered by these insurances are revised every 5 years. A normal Critical Illness Insurance is a cast iron policy, which carries on for a predetermined number of years. The payments stay the unchanged whilst the insurance is in place, which is usually the term of their mortgage. However this type of cover is becoming more expensive.
The Group Director of Friends Providents’s independent financial adviser division, George Daily says that you have to pay for the assurance that a guaranteed insurance policy supplies. He adds that customers are most likely to decide on a renewable rather than a guaranteed policy as the build up in pricebroadens. While Scottish Provident increases it’s Critical Illness Cover it is also introducing a reviewable policy therefore offering customer a choice. Skandia has removed it’s guaranteed Critical Illness Coverhave a guaranteed insurance policy. He recommends that if you don’t by now have cover it would be wise to take it out soon,| before, any further changes are announced.
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