Food & Drink

As More Patients Survive Critical Premiums Rise

Summary
The result of advances in medical science on Critical Illness policies. The payouts afforded by reviewable policies.

Premiums for Critical Illness Insurance are escalating due to the expanding number of claims and apprehension about medical advances in the future future. Once diagnosed with a life threatening illness, CIC pays you a tax free payout, which will support you financially if you are unable to work, due to illness.

 2 top insurance companies will be increasing the price of insurance shortly. Scottish Provident’s premium will rise by 19 to 24 per cent and that of Standard Life by 19 per cent. These increases are small in comparison with the 53 per cent imposed by BUPA and Friends Provident and the 65 per cent announced by Scottish Equitable and Norwich Union. Liverpool Victoria are still deliberating what increase they will enforce next month.

The insurance industry is in turmoil as improvements in medical science assist patients to survive illnesses, which would have been terminal only 8 years ago. The effect of this massive change in health insurance is that life insurance claims are reducing whilst settlements on critical illness insurance policies have witnessed a sudden rise. Thus the cost of life cover is dropping, whilst that of critical illness cover is rising swiftly.

In an effort to reduce the sharp rise in premiums, the AIB has amended the conditions under which cover is given for heart problems and prostrate cancer.

Many patients are now discovering that early recognition of these illnesses results in elongated life expectancy. The conditions under which CIC policies make a pay out are being redefined. This change will help to decrease the number of claims and subsequently decelerate the rapidity at which payments are rising. (For instance), CIC will only pay out for skin cancer if it is invasive)

Freddie Harrrison of broker’s Tesco Finance says that critical illness insurance policies at present cover conditions, which are easier to diagnose and treat. Claims are therefore being paid out for non-life threatening conditions, which is not the purpose of the policy
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A review of the terms of many policies is expected in the future. Critical Illness Insurance for diabetes is being removed by PPP, which leaves BUPA as the only insurance company that incorporates this illness.

 Reviewable life insurance policies are at this moment being provided by a growing number of insurance companies. Illnesses and premiums covered by these policies are examined every five years. A standard CIC is a cast iron insurance, which runs for a stipulated number of years. The payments stay the same whilst the cover is in place, which is normally the term of their home owner loan. However this type of insurance is becoming more pricey.

The Group Director of LV’s independent financial adviser division, George Daily says that you have to pay for the reassurance that a guaranteed insurance policy gives. He adds that people are much more likely to choose a renewable rather than a guaranteed policy as the build up in costexpands. While Scottish Provident increases it’s CIC it is also introducing a reviewable insurance thus offering customer a choice. Skandia has withdrawn it’s guaranteed Critical Illness Coverhave a guaranteed policy. He recommends that if you don’t already have cover it would be wise to take it out now,| before, any further changes are announced.

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