Summary
The effect of improvements in medical science on Critical Illness policies. The payouts afforded by reviewable insurances.

Premiums for critical illness are rising due to the intensifying number of claims and apprehension about medical improvements in the foreseeable future. As soon as you are diagnosed with a life threatening illness, Critical Illness Insurance pays you a tax free payout, which will help you financially if you are off work due to illness.

 2 large insurance companies will be elevating the price of insurance soon. Aviva’s payment will rise by 20 to 24 per cent and that of PPP by 20 per cent. These increases are minute in comparison with the 55 per cent imposed by BUPA and Friends Provident and the 63 per cent announced by Norwich Union and Scottish Equitable. LV are still considering what rise they will impose next month.

The insurance market is in uncertainty as developments in medical science assist patients to survive serious conditions, which would have been terminal only 11 years ago. The result of this massive change in medical insurance is that life insurance claims are decreasing whilst pay outs on critical illness policies have witnessed a sudden increase. Thus the cost of life insurance is going down, while that of critical illness insurance is rising quickly.

In an attempt to reduce the sharp rise in premiums, the Association of British Insurers has altered the conditions under which insurance is offered for heart problems and prostrate cancer.

Many sufferers are now finding that early detection of these illnesses results in elongated life expectancy. The conditions under which CIC policies make a pay out are being redefined. This change will help to lower the amount of claims and consequently decelerate the rate at which payments are increasing. (For instance), critical illness insurance will not pay out for skin cancer unless it is invasive)

Henry Judd of broker’s Direct Line 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 of the policy
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A review of the conditions of many insurance policies is likely in the foreseeable future. Critical Illness Insurance for diabetes is being taken away by Standard Life, which leaves Norwich Union as the only insurance company that includes this illness.

 Reviewable life cover are at present being given by an increasing number of insurers. conditions and pay outs covered by these policies are looked at every 4 years. A classic Critical Illness Insurance is a guaranteed policy, which carries on for a predetermined number of years. The payments remain the same whilst the cover is in place, which is usually the term of their home owner loan. However this kind of insurance is becoming more pricey.

The Group Director of Liverpool Victoria’s independent financial adviser division, George Daily says that you have to pay for the assurance that a guaranteed insurance policy offers. He states that people are most likely to choose a renewable rather than a guaranteed policy as the rise in costexpands. While Scottish Provident raises it’s CIC it is also launching a reviewable policy thus giving customers a choice. Royal London has removed it’s guaranteed CIChave a guaranteed policy. He recommends that if you do not already have cover it would be wise to take it out soon,| prior to any more changes being announced.

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