Why do people shun Critical Illness Cover?

Life Critical Illness Cover is still a relatively new type of insurance.  Insurance premiums are set accoding to statistics and as such each year statistics and claims history are updated, premiums are adjusted accordingly.  Critical Illness Cover has got more expensive over the past 10 years for this reason.

Generally there are two types of people, those who see the sense in insurance and those who don’t.  For those who see the sense in insurances there are many to choose from and some are considered more important than others.  It never ceases to amaze me how people put the best type of insurance policy for their car or pet before their own personal insurance needs.  People in general take their health for granted and think that ‘it will never happen to me.’  Fully comprehensive car insurance is considered a must whilst life and critical insurance is considered an option.  One client recently said that his car insurance was worth it because his car was worth £40000.  He placed no value on his own life though.

For someone who arranges lots of mortgages I am surprised to see how many people there are who think that life insurance is just not necessary.  Even when questioned as to how a couple would manage if one partner were to die during the term of the mortgage, most couples just say that the surviving partner would sell the property.  Given the current residential sales market this option is not exactly a quick option and anyway, if you had lived happily in a house for 10 years and your partner died would you want to be made homeless yourself because you couldn’t afford the mortgage payments on one salary?

The fact that people shun critical illness cover is even more amazing.  The chances of being diagnosed with cancer are 1 in 3.  Cancer survival statistics are increasing each year but treatment still remains a long and often painful process.  Most people diagnosed with cancer cannot continue to work which usually means that they are not paid.  The mortgage still needs to be paid each month as do other household bills.  Could the partner meet these expenses on their salary or would most partners be needed for emotional and moral  support for the diagnosed partner?

The simply fact is that most people would jump at the chance of free critical illness cover but when asked to pay for it most are not interested.  This is such a big risk to take when your home and family are affected by that decision.

When Critical Illness Cover Doesn’t Pay Out

Having Life Critical Illness Cover is all well and good but you don’t have to look too far on the internet to find examples of cases where the life insurance company didn’t pay out.

So why would a life insurance company not pay out?  There are two main reasons for this.  The main reason is non-disclosure.  Non-disclosure is where the applicant completed their critical illness cover application but failed to inform the life assurance company of past medical history.  If you were a life assurance company and someone said that you owed them thousands of pounds you would check into that claim!  The simple rule here is that if Critical Illness Cover makes enough sense to you to fill out an application form and apply, don’t give the life assurance company a reason not to pay out because you are worried about your past medical history.  It’s because of your past medical history that makes Critical Illness Cover is good idea.  Be honest, tell the life assurance company everything!

The second reason why Critical Illness Cover doesn’t pay out is because the illness diagnosed doesn’t match the specified illness in the plan.  Most reputable Critical Illness providers will use the ABI’s standard definitions list as well as have their own definitions which can be requested prior to application.  Read them and make sure you are happy with the definitions and what they mean to you.

If you follow these two simple rules then the chances of a life assurance company not paying your claim are limited.  Millions of pounds each year are paid by critical illness providers to successful  claimants so don’t let the small number of negative internet comments put you off.