Life insurance Updated:
A new initiative to improve Critical Illness cover (CIC) has been launched by the Association of British Insurers (ABI), writes Jane Baker. The 'Statement of Best Practice for Critical Illness Cover' will enable customers to understand exactly what CIC provides and what they can claim for.
Following in-depth consultation and consumer research, key changes include a new standard description of CIC to ensure consumers see a consistent explanation of the product. The wording is as follows: 'Life and critical illness cover pays out a lump sum if you either die or are diagnosed with a critical illness that meets our policy definition. We only cover the critical illnesses we define in our policy and no others'. Furthermore, better definitions of each critical illness will give a clearer view of exactly what is covered so there is less room for doubt about when policyholders should make a claim, leading to fewer rejections.
Nick Kirwan, Chairman of the ABI's Critical Illness Working Party, said: "Consumers will see the new standard description over and over again from all insurers and this will reinforce the message of what critical illness cover does and doesn't do. Over 12 million adults and children are covered by around five million critical illness policies which have paid out over £1.6 billion since 2000 to people who are critically ill. These changes will ensure that the product continues to meet this essential consumer need at an affordable price."
Commenting on the ABI's initiative, Roger Edwards, Product Director at critical illness insurer Bright Grey, said: "We support the changes to the descriptions of critical illness definitions as they will bring greater clarity and consistency across the industry. This has to be to the benefit of consumers and we believe it is also the best way forward if we are to secure the future of critical illness cover in its present form." He added: "Critical illness cover is an important part of the protection mix and the new 'Statement of Best Practice' will enable it to remain relevant in the face of future medical developments."
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