The protection specialists latest figures have shown that their Critical Illness payouts have risen by 20% between 2005 and 2007.

But equally the number of claims being declined has risen.

Zurich declined 12 per cent of critical illness claims in 2007, compared with 10 per cent in 2006.

The insurer found in 2007 3% of claims were declined due to non-disclosure and 9% were turned down due to the definition of an illness simply not being met. 

Cancer has remained the most common condition accounting for 55% of critical illness claims paid in 2007.

Heart attacks were the cause of 13% of critical illness claims paid out and strokes were the third most common condition, accounting for 6%.

Alan Lakey, of IFA Highclere Financial Services, says: ‘The trouble with critical illness and income protection is a lot of clients, and advisers, do not understand the definitions. A client may have had an operation for a blocked artery but the definition of the policy may only cover the client for two blocked arteries.’