Critical illness insurance to be reformed
30 November 2009 11:32:08
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| A 'catch all' benefit for the insurance will change. |
The industry group has been canvassing expert opinion for planned amendments to the current definition of the Total Permanent Disability (TPD) benefit included in critical illness policies.
It is hoped the updated definition will allow customers to understand more clearly what the insurance does and does not cover.
Critical illness insurance claims are commonly made when the policyholder suffers from a serious disease or condition, such as cancer and Alzheimer's.
Common conditions are listed on the policies, but a customer who contracts a non-listed condition can still claim for cover through the TPD benefit.
The ABI changes have the stated intention of removing ambiguities surrounding this "catch all" alternative.
Included in the proposed reforms is a new Statement of Best Practice for the policies.
Nick Kirwan, the ABI's assistant director for health and protection, said: "It is vital that customers understand what their critical illness policy does and doesn't cover.
"We heard that people want standard definitions, and that education and clarity are key to improving understanding. We have more work to do, but we now have a clear view of how to go forward and achieve these aims."
Critical illness insurance was invented by a South African doctor in the 1980s and is currently offered by most UK life insurance providers.
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