Critical illness payouts continue to rise - Health insurance - News - Moneyfacts


Critical illness payouts continue to rise

Critical illness payouts continue to rise

Category: Health insurance

Updated: 26/11/2012
First Published: 21/04/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
2009 proved to be a record year for critical illness payouts, as non-disclosure continued to fall, research conducted by has found.

Insurers paid out more than nine in ten (90.5%) of all critical illness claims last year, up from the figure of 88.4% reported by LifeSearch in 2008.

Encouragingly, just 1.9% of claims were turned down on the basis of non-disclosure, which refers to a case where the claimant is adjudged to have withheld pertinent information during their application for the policy.

In 2008, 2.5% of claims were turned down because of non-disclosure.

The proportion of claims rejected for not meeting the definition of the illness set out in the policy dropped from 9.1% to 7.6%.

The number of critical illness claims that providers pay out has increased markedly in recent years, with figures showing that closer to 75% of claims were upheld when statistics were first published six years ago.

In addition, three quarters of providers either improved on or maintained the level of payouts they achieved in 2008.

"With non-disclosure having long been a contentious issue within the critical illness industry, it appears the efforts of providers and the Association of British Insurers to tackle the problem are finally being rewarded," said Richard Eagling, editor of Investment, Life and Pensions Moneyfacts.

"The improvement in the claims statistics can only serve to improve confidence in the critical illness proposition."

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