This new statement is the result of extensive consultation and research into what customers need and where there have been problems in the past.
It will improve the clarity and understanding of the Total Permanent Disability (TPD) cover in CI insurance policies. While TPD only represents 3% of all claims under CI, a high proportion of those claims in the past have been declined, which is highly distressing for customers making the claims. It is hoped that the new statement will have an impact in further reducing unsuccessful claims.
The new Statement of Best Practice for Critical Illness Insurance includes
- For TPD, a new set of standard definitions with more descriptive headings which will make the cover clearer, support an education plan to improve understanding and reduce the number of claims declined.
- A change in wording to the Terminal Illness definition in the light of changing medical science, and clarity improvements to the Cancer and Parkinson’s disease definitions.
- The standardisation of the pre-existing conditions exclusion for Children’s Critical Illness insurance. For some insurers this condition is in the top five causes of claim, most for children diagnosed with leukaemia.
Commenting, Nick Kirwan, the ABI’s assistant director of health and protection, said: “TPD accounts for around 3% of all critical illness claims, yet has a much higher rate of claims declined than other CI claims.
“The new more descriptive headings and standard definitions will help make the scope of TPD cover much clearer. The project has attracted a lot of interest from many countries as these are the first standard TPD definitions in the world.
“Children’s cover is one of the most common causes of claims under critical illness policies. The work on developing standard definitions for TPD and children’s cover will help ensure that critical illness policies are clear and pay out in line with customer expectations.”
ABI members will be required to implement the new wordings as soon as is practical, but in any event by no later than the end of next year.