Insurers rejected claims on critical illness, income protection and life assurance policies to the tune of £44 billion last year, new research from Prudential has shown.
Over the last five years, 1.6 million Britons have had claims on protection policies rejected with the average failed claim worth £26,435, the research finds.
Critical illness policies suffered the worst knock-back rate, with as many as one in five claims rejected – often because customers were found to have failed to disclose a relevant condition when they took out the policy.
But many instances of non-disclosure were inadvertent, Prudential stressed – because it was not properly explained at the point of sale what the relevant conditions would be and what exactly the policy would cover.
The value of critical illness claims rejected totalled £90,000 on average.
A recurring theme was that the insurer may not consider the customer's illness, such as a heart failure, cancer or stroke, to be sufficiently 'critical' to merit compensation.
The Association of British Insurers (ABI) has hastened to underline its commitment to cutting the number of rejected claims, by developing clearer, more detailed applications forms which would ensure that customers disclosed all relevant detail.For more information about critical illness insurance, click here.
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