According to the Association of British Insurers, the amount paid to customers through critical illness and life insurance policies continues to rise significantly.
In 2010, the total value of £1.9 billion was paid out to more than 40,000 families and individuals through critical illness (CI) and life insurance policies. The average amount paid in 2010 was £47,166, which is almost double the UK average salary.
The insurance industry took action after the level of claims turned down reached 16% in 2007 by helping people better understand their policies, so that fewer claims are declined at times when people are undergoing stress, bereavement or trauma.
Director of Life and Savings at the ABI, Maggie Craig said:
“Critical illness and life insurance policies are crucial in helping people during some the most difficult times in their lives and can play a key part in the financial support needed to be able to pay off a mortgage, as well as provide dependants with some financial security in the event of your death. The industry continues to work closely with its members to ensure that all claims are handled as quickly and as sensitively as possible, making a real difference to people’s lives at the most difficult of times.
“Insurers recognise that financial hardship can arise due to the lengthy legal process associated with sorting out a deceased person’s estate as well as coping with the effects of living with a serious long term health condition. Insurance companies want to pay valid claims as quickly as possible and continue to look at ways to reduce the number of unaccepted claims.”
To ensure consumers are treated fairly in dealing with claims, the ABI introduced guidance on insurance claims in 2008 to make sure that no customer would be worse off as a result of making a genuine mistake by failing to disclose medical or other information. Figures from the Financial Ombudsman Service showed that since the guidance was introduced in 2008, the number of long-term protection complaints has reduced by 50%.
The ABI also helps to improve consumer knowledge with :
– Issued a statement of best practice in 2011 to help insurers provide consumers with a better understanding of how critical illness policies work and what they are covered for.
– Produced guidance in May 2011 to help speed up life insurance payments issued to consumers which cuts out some of the legal delays and means people can get their money much sooner. This is already starting to have an impact and the ABI is currently researching the benefits this has to consumers.
Source : ABI
