Recent figures from the Association of British Insurers (ABI) show term assurance and/or critical illness policy claims at over 100 per day. According to the ABI the average claim stood at approximately £52,000 which is roughly double the average UK annual salary.
This saw the number of critical illness policy claims paid out rising to 90% in 2009, compared with 80% in 2005, and for term assurance (life insurance), 97% of claims were paid last year.
It is believed the new Code of Practice has led to fewer claims being declined due to non-disclosure and the ABI stated it is now working with its members to tackle the number of claims declined due to not meeting the definition of “Total Permanent Disability”.
Nick Starling, the director general commented “The insurance industry pays out £5.9 million every day in life insurance and critical illness cover claims, making a real difference to people’s lives when at their most difficult. The new ABI code is making a dramatic improvement to the number of critical illness claims we pay.”
The ABI has also been working with the Law Commission in reviewing the Marine Insurance Act 1906, an aspect of insurance contract law that has resulted in huge numbers of claims being rejected over the years.
Currently, as the policholder you have a duty of disclosure when completing an insurance proposal form, you must answer the questions asked by the insurer but are also expected to disclose any other facts that may be relevant. This unfortunately could well leave you in a position of not knowing what additional information to disclose as it is not to your knowledge what information the insurer will take into account when accepting a risk. This has in the past left scope for levels of non-disclosure resulting in claims not being paid.
If you want to know more or are looking for a specific insurance policy, whether you need income protection insurance advice or you are simply trying to find an affordable health insurance policy, we are here to help.
