Pharmacy Technician

As More Patients Survive Critical Premiums Rise

Summary
The result of advances in medical science on Critical Illness policies. The benefits afforded by reviewable policies.

Premiums for Critical Illness Cover are escalating due to the mounting number of claims and concern about medical developments in the foreseeable future. Once diagnosed with a life threatening illness, CIC gives you a tax free payout, which will help you financially if your illness prevents you from working.

 Two major insurance companies will be increasing the price of critical illness insurance soon. Scottish Provident’s premium will rise by 20 to 25 per cent and that of Swiss Life by 19 per cent. These increases are small when compared with the 50 per cent imposed by Friends Provident and BUPA and the 60 per cent introduced by Scottish Equitable and Norwich Union. LV are still considering what increase they will enforce next month.

The insurance companies are in chaos as improvements in medical science help patients to survive severe illnesses, which would have been terminal only 9 years ago. The effect of this massive change in medical cover is that life insurance claims are decreasing whilst settlements on critical illness policies have observed a sharp increase. Thus the cost of life cover is going down, whilst that of critical illness cover is growing swiftly.

In an attempt to keep the price of premiums down, the AIB has amended the circumstances under which insurance is provided for prostrate cancer and heart problems.

Many sufferers are now discovering that early detection of these illnesses results in elongated life expectancy. The illnesses under which Critical Insurance policies pay out are being redefined. This development will help to reduce the number of claims and subsequently decelerate the rapidity at which payments are rising. (For instance), critical illness insurance will only pay out for skin cancer if it is invasive)

Jim Young of broker’s LifeSearch says that critical illness policies at the moment cover illnesses, which are simpler to diagnose and treat. Claims are therefore being paid out for non-life threatening illnesses, which is not the purpose of the insurance
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An evaluation of the conditions of many policies is probable in the future. CIC for diabetes is being taken away by PPP, which leaves Friends Provident as the only insurer that includes this illness.

 Reviewable term assurance are now being given by a growing amount of insurance companies. conditions and premiums covered by these policies are looked at every 5 years. A normal Critical Illness Cover is a cast iron insurance, which runs for a stipulated number of years. The payments stay the same whilst the cover is in force, which is usually the term of their home owner loan. On the other hand this kind of cover is becoming more pricey.

The Group Director of LV’s independent financial adviser division, James Keen says that you have to pay the price for the reassurance that a guaranteed insurance policy supplies. He adds that people are more likely to pick a renewable rather than a guaranteed insurance policy as the rise in pricewidens. While Scottish Provident raises it’s Critical Illness Cover it is also launching a reviewable insurance consequently providing customer with a choice. Skandia has withdrawn it’s guaranteed Critical Illness Coverhave a guaranteed policy. He suggests that if you don’t by now have cover it would be wise to take it out post haste,| prior to any more changes being announced.