ABI publishes updated best practice to improve customer understanding Critical Illness Insurance

ABI publishes updated best practice to improve customer understanding Critical Illness Insurance

ABI publishes updated best practice to improve customer understanding Critical Illness Insurance

Customers will have a better understanding of what they are covered for under their Critical Illness (CI) insurance as the ABI publishes an updated Statement of Best Practice to help people who need to make a claim.

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.

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.

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Notes for Editors

1. Enquiries to:
Liz Forster 020 7216 7444 (Mobile: 07717 578 586)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. There are different definitions of disability that may apply to TPD cover such as; own occupation; suited occupation, any occupation, activities of daily work and activities of daily living.

An example of a heading would be:

Total permanent disability – unable [before age x] to do your own occupation ever again

3. The ABI will be producing training materials for advisers; an online hub of information and a claims process map for consumers which we believe will make claiming easier and increase successful claims.

4. The ABI is the voice of the UK’s insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.

The ABI’s role is to:

– Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
– Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
– Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
– Promote the benefits of insurance to the government, regulators, policy makers and the public.

The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 24% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing over 275,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with a fifth of its net premium income coming from overseas business.

Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £155 million in benefits to pensioners and long-term savers as well as £58 million in general insurance claims.

5. An ISDN line is available for broadcasts.

6. More news and information from the ABI is available on our web site, www.abi.org.uk