As More and More Patients Recover Critical Illness Premiums increase

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

payments for critical illness are increasing due to the mounting amounts of claims and apprehension about medical advances in the foreseeable future. If you are diagnosed with a life threatening illness, Critical Illness Insurance pays you a tax free lump sum, which will support you financially if you are off work due to illness.

 Two major insurance companies will be elevating the price of cover shortly. Scottish Provident’s payment will increase by 23 to 26 per cent and that of Swiss Life by 22 per cent. These rises are minuscule when compared with the 53 per cent imposed by Friends Provident and BUPA and the 65 per cent introduced by Norwich Union and Scottish Equitable. LV are still deciding what increase they will enforce next month.

The insurance market is in uncertainty as advances in medical science assist patients to recover from illnesses, which would have been terminal only 10 years ago. The result of this huge alteration in health cover is that life insurance claims are decreasing whilst settlements on critical illness insurance policies have witnessed a sudden increase. Therefore the cost of life cover is going down, whilst that of critical illness insurance is growing rapidly.

In an effort to reduce the sharp rise in premiums, the Association of British Insurers has altered the circumstances under which cover is given for heart problems and prostrate cancer.

Many patients are now finding out that early recognition of these illnesses results in extended life expectancy. The illnesses under which Critical Insurance Cover policies make a pay out are being redefined. This change will help to decrease the number of claims and consequently slow down the pace 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 Tesco Finance says that critical illness insurance policies at the moment cover illnesses, which are simpler to detect and treat. Claims are therefore being settled for non-life threatening conditions, which is not the point of the policy
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An evaluation of the conditions of many policies is expected sometime soon. CIC for diabetes is being removed by Swiss Life, which leaves Norwich Union as the only insurance company that incorporates this condition.

 Reviewable term assurance are at present being supplied by a growing number of insurance companies. Illnesses and premiums covered by these insurances are revised every 5 years. A standard Critical Illness Insurance is a guaranteed policy, which keeps going for a predetermined number of years. The premiums remain the same whilst the insurance is in place, which is usually the length of their mortgage. On the other hand this kind of insurance is becoming more costly.

The Group Director of LV’s independent financial adviser division, James Keen says that you have to pay the price for the assurance that a guaranteed insurance policy offers. He says that consumers are most likely to pick a renewable rather than a guaranteed insurance policy as the rise in pricebroadens. While Scottish Provident increases it’s Critical Illness Insurance it is also launching a reviewable insurance therefore providing customer with a choice. Royal London has withdrawn it’s guaranteed Critical Illness Coverhave a guaranteed policy. He advises that if you do not already have insurance it would be a sensible to take it out post haste,| prior to any more changes being announced.

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