Five per cent of people have lied on protection applications and one in five people do not read all the terms and conditions before they sign up according to Friends Provident.Friends surveyed 2071 people and found 54 per cent believed dishonest applicants should not be paid any benefits if they needed to claim. Fifteen per cent said applicants who have lied should get a percentage of the full payment depending on the type of information they withheld.
The firm found that just under half of respondents researched life insurance on the internet and through the media but 20 per cent said they would ask a financial adviser for advice.
If people had a fiver each month that they had to spend on insurance 28 per cent would choose life insurance according to Friends and 17 per cent would choose income protection. But if they did not have to spend it on insurance nearly a third would spend it on food.
Protection products and actuarial manager at Friends Provident Mark Jones says:
“It’s good to see that many people recognise the importance of advice when buying insurance, and that they take the time to answer all questions truthfully when applying for insurance.
“The insurance business is here to provide peace of mind and is not just about collecting premiums and paying valid claims. It’s important that people read the terms and conditions before they sign up.”
Insurance companies have made a landmark agreement to pay more claims where customers have unintentionally not disclosed medical information, following guidance from the Association of British Insurers (ABI).
The decision applies to critical illness, income protection and life insurance unless the customer deliberately withheld information.
The guidance, drawn up in consultation with the Financial Ombudsman Service and ABI member companies, comes into immediate effect for new and existing protection insurance policies.
It means insurers will pay customers a fair sum, reflecting risk and premiums paid, if customers fail to provide the relevant information.
Insurers will refund premiums in “a small number of exceptional cases” if they would not have taken on the policy had they known the full facts.
Stephen Haddrill, the ABI’s director general, says: “Customers want to know that their insurance claim will always be assessed fairly and paid without fuss.
“The industry wants customers to be able to take out insurance with confidence. Today insurers have signed up to ensuring both of these happen. The number of protection claims that are turned down will fall.”
The move follows guidance on improving application form clarity and clearer descriptions of the main conditions covered by critical illness insurance in 2006, and improving telephone and online protection insurance application clarity last year.
One in three of us will be diagnosed with cancer during our life. The disease tends to affect older people - but can strike at any time.
Excluding certain skin cancers, there were more than 270,000 new cases of the disease in 2001 - and the rate is increasing by about 1% a year.
Some cancer, such as breast, are becoming more common, while new cases of lung cancer fall away due to the drop in the number of smokers.
However, while the overall number of new cancers is not falling, the good news is that successful treatment rates for many of the most common types are improving rapidly.
So your chance of survival is better but a little cash injection would certainly help your road to recovery by removing any financial stress. Critical illness cover pays out when you are diagnosed with cancer but can be expensive. Use our site to find which insurance company is offering the lowest premium by getting your comparison quote here.
