Summary
The outcome of advances in medical science on Critical Illness policies. The payback afforded by reviewable insurances.

Premiums for Critical Illness Insurance are increasing due to the intensifying amounts of claims and concern about medical developments in the future future. If you are diagnosed with a life threatening illness, Critical Illness Insurance gives you a tax free payout, which will help you financially if your illness prevents you from working.

 2 major insurance companies will be elevating the price of insurance shortly. Aviva’s premium will increase by 19 to 24 per cent and that of Standard Life by 20 per cent. These increases are small when compared with the 55 per cent imposed by Friends Provident and BUPA and the 62 per cent introduced by Norwich Union and Scottish Equitable. LV are still deciding what increase they will enforce next month.

The insurance industry is in chaos as advances in medical science assist patients to survive illnesses, which would have been life threatening only 9 years ago. The result of this massive change in medical cover is that life insurance claims are decreasing whilst pay outs on critical illness policies have seen a sharp increase. Therefore the cost of life insurance is dropping, whilst that of critical illness insurance is rising rapidly.

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

Many patients are now finding that early recognition of these illnesses results in extended life expectancy. The conditions under which Critical Insurance policies settle are being redefined. This development will help to decrease the number of claims and consequently decelerate the rapidity at which premiums are rising. (For example), CIC will only pay out for skin cancer if it is invasive)

Karl Peters of broker’s Click Compare says that critical illness policies at present 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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An appraisal of the conditions of many policies is expected in the future. Critical Illness insurance cover for diabetes is being removed by Swiss Life, which leaves BUPA as the only insurance company that incorporates this illness.

 Reviewable life insurance cover are at present being provided by an escalating amount of insurance companies. conditions and premiums covered by these policies are reviewed every five years. A normal Critical Illness Insurance is a cast iron insurance, which keeps going for a set number of years. The premiums remain the unchanged whilst the insurance is in place, which is usually the term of their home owner loan. On the other hand this type of cover is becoming more pricey.

The Group Director of Liverpool Victoria’s independent financial adviser division, Harrison Lloyd says that you have to pay the price for the reassurance that a guaranteed insurance policy offers. He says that consumers are most likely to want a renewable rather than a guaranteed policy as the rise in pricebroadens. Whilst Legal and General raises it’s Critical Illness Cover it is also launching a reviewable policy thus giving customers a choice. Skandia has removed it’s guaranteed CIChave a guaranteed policy. He recommends that if you don’t already have cover it would be a shrewed decision to take it out post haste,| prior to any more changes being announced.

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