Critical Illness Insurance Now Pays Out 905 percent Of Claims
21 April 2010 / by Rachael Stiles
Critical illness insurance providers are now paying out 90.5 per cent of claims – more than ever before – since the industry started successfully solving the problem of non-disclosure.
New research from Investment Life & Pensions Moneyfacts has found that insurers are eradicating the problem of non-disclosure from the critical illness insurance sector, which was previously hindering payouts.
More payouts were made in 2009 than ever before, the survey found, which Moneyfacts determines is due in part to fewer policyholders having their critical illness insurance claims rejected on the grounds that they withheld relevant information at the time of their application.
In 2009, 90.5 per cent of claims were paid out, compared to 88.4 per cent the previous year, as reported by LifeSearch, and up from 75 per cent when records of claims started being published in 2004.
The provider with the highest payout rate was Legal & General critical illness insurance, followed by AXA and Bright Grey, while the number of claims rejected on the basis of not meeting the definition of the illnesses outlined in the policy fell to 7.6 per cent.
Just 1.9 per cent of critical illness insurance claims were rejected on the grounds of non-disclosure of information last year, compared to 2.5 per cent in 2008.
Commenting on the figures, Richard Eagling, editor of Investment Life and Pensions Moneyfacts, said: “With non-disclosure having long been a contentious issue within the critical illness industry, it appears the efforts of providers and the Association of British Insurers to tackle the problem are finally being rewarded. The improvement in the claims statistics can only serve to improve confidence in the critical illness proposition.”
© Fair Investment Company Ltd