Norwich Union, one of the UK’s largest insurers have revealed that their critical illness claims payouts increased by 14% last year compared to the previous year, 2007.  This is a substantial increase and follows the trend other insurers have been reporting.  Critical illness payouts are increasing across the board.  Norwich Union said that 90% of claims (1625) were honoured whilst 2% were declined due to non-disclosure and 8% declined as the illness did not match the required definition.  It is interesting to note that the non-disclosure percentage for 2007 was 4% so this is clearly a step in the right direction.

“We are committed to ensuring that our customer’s understand their purchase, but it is up to the whole industry, both providers and advisers, to help customers understand the cover they buy,” said Michael Whyte, chief underwriter for Norwich Union.

It is interesting that Michael mentioned advisers in helping customers to understand the product they are buying.  One of our recent articles discussed the topic of insurers offering critical illness without advice through their own dedicated web portals.  Clearly Michael sees the advantages to having advisers recommending critical illness insurance as this process will only increase claims payouts in the future together with declining cases of non-disclosure and claims not meeting the required definition.  Critical illness insurance is a complex product and people need to know exactly what they are paying for.  Advisers are the only ones qualified enough to be able to make these recommendations between the different plans on the market.