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Doctor has Bad News; Insurer Even Worse
Summary
The system in which the gravity of an illness can affect the pay out. How insurance companies are constructing new plans which propose limited pay outs.
Learning that you have cancer is devastating news. At some stage in our lives, one in 4 of us will suffer from the disease. It is not surprising that PruHealth found that of all diseases, cancer gives Britons utmost apprehension.
At this trying time you would anticipate an instantaneous pay out by your best life insurance company, making it possible for you to concentrate on getting well. Alas you could receive a big surprise. Many cancer sufferers make a complete recovery thanks to progression in medical science. Currently some cases are not seen as critical, so it is disturning to discover that mostmedical and life insurance policies only pay up when your illness is life threatening or terminal.
An independent financial adviser, counsels that people must not take for granted that they will receive a pay out seeing as they have been diagnosed with a serious illness. He warns people not to think about the cost alone when taking out insurance, but to read the small print in a private medical or critical illness policy to certify that the insurers will settle when you need it most.
On the diagnosis of a particular condition, critical illness cover will pay out a lump sum. Whereas, you will receive improved quality and speed of treatment with private health/medical insurance. For instance, appropriate licensed treatments maybe available, which are not dispensed on the NHS. A spokesperson of independent advice firm Direct Life and Pensions says about 17 per cent of claims fall short on protection policies and at settle for serious conditions and diseases. Then again some cancers sound much worse than they are and in these cases you probably won’t receive any money from standard plans.
Formerly insurers had an all or nothing approach, but they are now beginning to supply policies with a partial or full payout. An illustration of this is PruProtect, an alternative critical illness policy from the Prudential, which relates the size of the pay out to the severity of the illness and how much suffering it will cause. This policy does not turn out to be invalid once a claim is made but successive settlements may be reducedconsiderably. This figure is particularly crucial when the patient is diagnosed with a stage 1 or stage 2 cancer, which may become even more serious.
Just lately the life insurance industry dealt with the vexed issue of customer non-disclosure. The ABI has brokered a new contract, which will enable claims effected by non-disclosure to get a partial or full settlement, which has not been the case in the past.
