Critical Illness cover has always been a complex product to the UK market. The ABI offers a standard definition list which most of the critical illness insurance providers subscribe to but then these providers can also offer their own definitions and illnesses in addition to the ABI list too. This is what leads to confusion in the market place. Two providers can charge the same premium yet they both offer different plans. This is precisely why it is best to get advice from a broker before buying cover.
In America critical illness cover exists and is a popular product but at the same time it competes to a certain extent with cancer insurance. That’s right, there are two plans to choose from. Cancer accounts for approximately 60% of critical illness cover claims yet it is only one of at least 22 illnesses covered by most critical illness policies. One of the reasons for people declining critical illness cover is cost, so would it make sense for providers to also offer a cancer only product? By doing this there would be no confusion as to what was covered within the policy. The providers could still use the ABI standard definition of cancer. Obviously the policy would be slightly cheaper than a standard critical illness policy as only one definition would be covered but it could mean that if there was a greater take up then more people would be covered against the number one critical illness definition.
The motor insurance industry has been splitting policy cover for a long time in an effort to make policies more appealing to those on a budget. you can have fully comprehensive with windscreen cover, breakdown cover, replacement car and legal expenses if budget isn’t an issue but if it is you can simply opt to remove extras you don’t wish to pay for. Maybe this option might work for the critical illness providers too.
Sun, Apr 12, 2009
critical illness cover