Critical Illness Premiums Increase As More Patients Recover
Summary
The outcome of advances in medical science on Critical Illness policies. The payouts afforded by reviewable insurances.
Premiums for critical illness are increasing due to the intensifying amounts of claims and apprehension about medical advances in the future future. Once diagnosed with a life threatening illness, CIC pays you a tax free lump sum, which will support you financially if you are off work due to illness.
Two large insurance companies will be putting up the price of cover soon. Scottish Provident’s premium will rise by 20 to 27 per cent and that of PPP by 22 per cent. These rises are insignificant in comparison with the 50 per cent imposed by BUPA and Friends Provident and the 63 per cent announced by Scottish Equitable and Norwich Union. Liverpool Victoria are still deciding what increase they will impose next month.
The insurance companies are in turmoil as improvements in medical science aid patients to survive severe illnesses, which would have been life threatening only 12 years ago. The result of this huge change in medical insurance is that life insurance claims are decreasing whilst settlements on critical illness insurance policies have seen a sudden increase. Consequently the cost of life insurance is dropping, while that of critical illness cover is rising swiftly.
In an attempt to reduce the sharp rise in premiums, the Association of British Insurers has changed the circumstances under which insurance is provided for heart problems and prostrate cancer.
Many sufferers are now finding out that speedy recognition of these illnesses results in longer life expectancy. The illnesses under which Critical Insurance Cover policies settle are being redefined. This change will help to reduce the amount of claims and thus decelerate the rate at which premiums are increasing. (For example), critical illness cover will only pay out for skin cancer if it is invasive)
Henry Judd of broker’s Tesco Finance says that critical illness policies at present cover illnesses, which are easier to diagnose and treat. Claims are consequently being settled for non-life threatening illnesses, which is not the of the insurance
.
A review of the terms of many policies is expected sometime soon. Critical Illness Insurance for diabetes is being taken away by PPP, which leaves Norwich Union as the only insurer that incorporates this illness.
Reviewable life insurance cover are at present being offered by an increasing number of insurance companies. conditions and pay outs covered by these insurances are reviewed every five years. A classic CIC is a guaranteed insurance, which keeps going for a predetermined number of years. The premiums remain the constant whilst the cover is in force, which is usually the length of their home owner loan. However this type of insurance is becoming more expensive.
The Group Director of Liverpool Victoria’s independent financial adviser division, James Keen says that you have to pay for the assurance that a guaranteed policy offers. He says that customers are most likely to decide on a renewable rather than a guaranteed insurance policy as the rise in costbroadens. Whilst Aviva raises it’s Critical Illness Cover it is also launching a reviewable policy therefore giving customers a choice. Royal London has removed it’s guaranteed Critical Illness Coverhave a guaranteed insurance policy. He suggests that if you do not by now have cover it would be prudent to take it out now,| prior to any more changes being announced.
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