As More Patients Survive Critical Premiums Rise
September 28, 2009
Summary
The outcome of developments in medical science on Critical Illness policies. The payback afforded by reviewable insurances.
Premiums for Critical Illness Cover are escalating due to the expanding number of claims and apprehension about medical developments in the foreseeable future. Once diagnosed with a life threatening illness, CIC pays you a tax free lump sum, which will help you financially if your illness prevents you from working.
Two major insurance companies will be increasing the price of cover soon. Scottish Provident’s premium will increase by 23 to 26 per cent and that of Swiss Life by 20 per cent. These rises are tiny in comparison with the 50 per cent imposed by Friends Provident and BUPA and the 60 per cent announced by Norwich Union and Scottish Equitable. Liverpool Victoria are still deciding what increase they will enforce next month.
The insurance market is in chaos as developments in medical science help patients to recover from severe illnesses, which would have been life threatening only 12 years ago. The result of this massive change in health insurance is that life insurance claims are decreasing whilst pay outs on critical illness insurance policies have seen a sharp increase. Therefore the cost of life cover is dropping, while that of critical illness cover is increasing swiftly.
In an effort to keep the price of premiums down, the Association of British Insurers has changed the conditions under which insurance is provided for prostrate cancer and heart problems.
Many sufferers are now finding that speedy detection of these illnesses results in extended life expectancy. The illnesses under which Critical Insurance Cover policies pay out are being redefined. This change will help to reduce the number of claims and subsequently decelerate the rate at which payments are increasing. (For instance), critical illness cover will not pay out for skin cancer unless it is invasive)
Karl Peters of broker’s Click Compare says that critical illness insurance policies at present cover conditions, which are easier to diagnose and treat. Claims are consequently being settled for non-life threatening conditions, which is not the point of the policy
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An appraisal of the conditions of many insurance policies is expected in the foreseeable future. CIC for diabetes is being taken away by Swiss Life, which leaves BUPA as the only insurance company that includes this condition.
Reviewable life cover are at present being given by an increasing amount of insurers. conditions and pay outs covered by these policies are looked at every 4 years. A standard Critical Illness Cover is a guaranteed policy, which carries on for a specif number of years. The payments remain the constant whilst the insurance is in place, which is usually the term of their home owner loan. On the other hand this kind of cover is becoming more pricey.
The Group Director of LV’s independent financial adviser division, Harrison Lloyd says that you have to pay the price for the reassurance that a guaranteed insurance policy offers. He states that people are most likely to decide on a renewable rather than a guaranteed insurance policy as the increase in pricewidens. While Aviva raises it’s Critical Illness Cover it is also launching a reviewable policy consequently giving customers a choice. Royal London has removed it’s guaranteed Critical Illness Insurance, whereas Scottish Widows is only offering reviewable insurance.
It is expected that Aviva’s reviewable price will be about 14% lower than the guaranteed cover. If you already have a guaranteed Critical Illness Cover it cannot be altered to include new classifications of illnesses.
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Freddie Harrrison from Click Compare believes that even though premiums on reviewable policies are possibly cheaper customers would much ratherhave a guaranteed policy. He advises that if you do not by now have insurance it would be wise to take it out soon,| before, any further changes are announced.