Terms & Conditions of Insurance Companies
Financial Advisers Advice:
Be careful regarding the terms and conditions that insurance companies have on their plans. If you come to claim on a critical illness plan you’ll find that companies are well protected by the small print they have. That is too late of course to enter into discussions regarding ...
Financial Advisers Advice:
Be careful regarding the terms and conditions that insurance companies have on their plans. If you come to claim on a critical illness plan you’ll find that companies are well protected by the small print they have. That is too late of course to enter into discussions regarding what you thought you had. Let me give you a few examples so you know what I mean. I’ll cover total and permanent disability (TPD) – claiming if you cannot return to work, and cancer – the biggest cause for claims on a critical illness plan.
The definition on TPD comes in a few guises. If you thought you were unable to work you would think you could claim – very wrong. The best definition you could have is ‘ unable to do your own occupation ‘ which pays out if you cannot do your own occupation! – Straightforward. More commonly you will see the following: ‘Unable to do your own occupation or any other’ or ‘any other for which suited’. Lastly the howler above all others is ‘work task definition’ i.e. able to dress unaided walk upstairs etc. Few plans that I see actually cover the very first ‘own occupation’ definition. This is common and is one method of making the monthly premium look cheaper, but of course you don’t have the cover you expect, so check it out.
Breast cancer is the most common cause of cancer in women with 40,790 diagnosed each year and prostate is the most commonly diagnosed cancer every year with 30,140 cases each year. Interestingly Skandia life pointed out that 70% of their prostate claims where for Gleason scores of 6 or less which are referred to as low grade prostate cancers. It may be worth your while knowing that since May 2003 low grade prostate cancer has been removed from the ABI’s cancer definition so if you have a plan that simply complies to that you will find you are not covered. Skandia points out that 59% of their female cancer claims are for breast cancer. As far as breast cancer is concerned Ductal carcinoma in situ (DCIS) is also excluded from the ABI cancer definition, so you would not be able to claim if your plan just had that definition. However for many women to ensure that DCIS does not develop into full blown invasive breast cancer they may be advised to have one or more breasts removed. Some companies have low-grade prostate cancer benefit in their plan and also have a mastectomy benefit for DCIS included at no extra cost although they do pay a restricted amount of cover.
Skandia point out that 58% of their claims are for cancer but the next two are for heart attack (15%) and heart surgery (8%). Only a few companies actually cover for balloon angioplasty yet over 2500 thousand angioplasties are carried out each year in the UK (british heart foundation 2004). 23% of skandia’s claims for heart surgery were actually for angioplasty.
These are just a number of the conditions and there are many more e.g. when is a heart attack not a heart attack – surely when your doctor says you’ve had one is good enough? Evidently not! Some insist that there has to be evidence of chest pains! I don’t expect that you will want to rummage through the policy you have to check this all out but it is better to check it now than later. If you don’t have the time ask an Independent Financial Adviser (IFA) to do it for you and you’ll go some way toward peace of mind.
Expert’s view: Score: 8 out of 10
Very good. You should also see our 'Useful Tips' section, which will give you quite a few more tips on what to do
Be careful regarding the terms and conditions that insurance companies have on their plans. If you come to claim on a critical illness plan you’ll find that companies are well protected by the small print they have. That is too late of course to enter into discussions regarding what you thought you had. Let me give you a few examples so you know what I mean. I’ll cover total and permanent disability (TPD) – claiming if you cannot return to work, and cancer – the biggest cause for claims on a critical illness plan.
The definition on TPD comes in a few guises. If you thought you were unable to work you would think you could claim – very wrong. The best definition you could have is ‘ unable to do your own occupation ‘ which pays out if you cannot do your own occupation! – Straightforward. More commonly you will see the following: ‘Unable to do your own occupation or any other’ or ‘any other for which suited’. Lastly the howler above all others is ‘work task definition’ i.e. able to dress unaided walk upstairs etc. Few plans that I see actually cover the very first ‘own occupation’ definition. This is common and is one method of making the monthly premium look cheaper, but of course you don’t have the cover you expect, so check it out.
Breast cancer is the most common cause of cancer in women with 40,790 diagnosed each year and prostate is the most commonly diagnosed cancer every year with 30,140 cases each year. Interestingly Skandia life pointed out that 70% of their prostate claims where for Gleason scores of 6 or less which are referred to as low grade prostate cancers. It may be worth your while knowing that since May 2003 low grade prostate cancer has been removed from the ABI’s cancer definition so if you have a plan that simply complies to that you will find you are not covered. Skandia points out that 59% of their female cancer claims are for breast cancer. As far as breast cancer is concerned Ductal carcinoma in situ (DCIS) is also excluded from the ABI cancer definition, so you would not be able to claim if your plan just had that definition. However for many women to ensure that DCIS does not develop into full blown invasive breast cancer they may be advised to have one or more breasts removed. Some companies have low-grade prostate cancer benefit in their plan and also have a mastectomy benefit for DCIS included at no extra cost although they do pay a restricted amount of cover.
Skandia point out that 58% of their claims are for cancer but the next two are for heart attack (15%) and heart surgery (8%). Only a few companies actually cover for balloon angioplasty yet over 2500 thousand angioplasties are carried out each year in the UK (british heart foundation 2004). 23% of skandia’s claims for heart surgery were actually for angioplasty.
These are just a number of the conditions and there are many more e.g. when is a heart attack not a heart attack – surely when your doctor says you’ve had one is good enough? Evidently not! Some insist that there has to be evidence of chest pains! I don’t expect that you will want to rummage through the policy you have to check this all out but it is better to check it now than later. If you don’t have the time ask an Independent Financial Adviser (IFA) to do it for you and you’ll go some way toward peace of mind.
Expert’s view: Score: 8 out of 10
Very good. You should also see our 'Useful Tips' section, which will give you quite a few more tips on what to do
Smokers
Financial Advisers Advice:
If anyone smokes, their life insurance, health insurance, and income protection will be considerably more than their non-smoking counterparts reflecting the perceived extra risk. If you have stopped smoking it is well worth your while approaching your provider of insurance to see if your premium can be dropped. ...
Financial Advisers Advice:
If anyone smokes, their life insurance, health insurance, and income protection will be considerably more than their non-smoking counterparts reflecting the perceived extra risk. If you have stopped smoking it is well worth your while approaching your provider of insurance to see if your premium can be dropped.
There are a number of items to consider here. Firstly: should you have been classed as a smoker? Some companies do not increase your premium if you smoke cigars or a pipe, which is very interesting. Therefore when you are applying for a quote you would put yourself down as a non-smoker for these companies.
If you have been rated as a smoker and have stopped, consider both these options: Ask your provider for a re-quote and apply to all providers for a completely new plan. The latter is a must for all those with life plans, not just smokers, and I would recommend this is done every two years as rates for life cover can drop considerably over time. Why should you continue to pay premiums at the same level for the whole life of the plan? For most its apathy.
If you ask your provider for a re-quote and keep the plan you have in force expect them to take different approaches to your cover. Axa Sunlife for example told us the client must not have smoked or used any tobacco related products for at least 12 months to change to a non-smoking status. In the event that a client begins smoking again, it will pay the full amount on a claim provided the non-smoking status was entered into in good faith. Legal and General however does not allow clients to change status on an existing policy and the four other big companies in the market Norwich Union, Skandia Life, Scottish Widows and Prudential also take this rigid, inflexible stance, proving big is not at all beautiful! Bupa will allow changes but a client must not have smoked for at least 12 months, should complete a non-smokers declaration and undergo a cotinine test which would have to be funded by the individual. Bright Grey will allow a change provided the client has ceased to smoke and has not used any nicotine replacement, such as patches, for at least 12 months. In a very honest move they will also use the non-smoking age/rate as at inception rather than at switch as will Scottish Equitable. Liverpool Victoria takes much the same approach as the others but would investigate whether the client had smoked within the 12-month period. If it could not prove that the client had smoked within this period it would pay the claim.
Scottish Provident will allow a switch as long as the client has not smoked for 12 months and it will use the age/rate at the time of the switch. Be careful however with this particular part as the company states that in the event of a client submitting a claim after having started smoking again it would consider each case individually, but would probably pay the full amount. Probably is not good enough for me as you wont be able to do anything about it if you aren’t here! If you cant really trust the wriggleability of insurance companies you would be better placed to proceed with a new application to another company. Remember to ensure your new plan is started before the old one is stopped.
Expert’s view: Score: 7 out of 10
Some excellent tips there if you are a smoker. Try the first one first (giving up).
If anyone smokes, their life insurance, health insurance, and income protection will be considerably more than their non-smoking counterparts reflecting the perceived extra risk. If you have stopped smoking it is well worth your while approaching your provider of insurance to see if your premium can be dropped.
There are a number of items to consider here. Firstly: should you have been classed as a smoker? Some companies do not increase your premium if you smoke cigars or a pipe, which is very interesting. Therefore when you are applying for a quote you would put yourself down as a non-smoker for these companies.
If you have been rated as a smoker and have stopped, consider both these options: Ask your provider for a re-quote and apply to all providers for a completely new plan. The latter is a must for all those with life plans, not just smokers, and I would recommend this is done every two years as rates for life cover can drop considerably over time. Why should you continue to pay premiums at the same level for the whole life of the plan? For most its apathy.
If you ask your provider for a re-quote and keep the plan you have in force expect them to take different approaches to your cover. Axa Sunlife for example told us the client must not have smoked or used any tobacco related products for at least 12 months to change to a non-smoking status. In the event that a client begins smoking again, it will pay the full amount on a claim provided the non-smoking status was entered into in good faith. Legal and General however does not allow clients to change status on an existing policy and the four other big companies in the market Norwich Union, Skandia Life, Scottish Widows and Prudential also take this rigid, inflexible stance, proving big is not at all beautiful! Bupa will allow changes but a client must not have smoked for at least 12 months, should complete a non-smokers declaration and undergo a cotinine test which would have to be funded by the individual. Bright Grey will allow a change provided the client has ceased to smoke and has not used any nicotine replacement, such as patches, for at least 12 months. In a very honest move they will also use the non-smoking age/rate as at inception rather than at switch as will Scottish Equitable. Liverpool Victoria takes much the same approach as the others but would investigate whether the client had smoked within the 12-month period. If it could not prove that the client had smoked within this period it would pay the claim.
Scottish Provident will allow a switch as long as the client has not smoked for 12 months and it will use the age/rate at the time of the switch. Be careful however with this particular part as the company states that in the event of a client submitting a claim after having started smoking again it would consider each case individually, but would probably pay the full amount. Probably is not good enough for me as you wont be able to do anything about it if you aren’t here! If you cant really trust the wriggleability of insurance companies you would be better placed to proceed with a new application to another company. Remember to ensure your new plan is started before the old one is stopped.
Expert’s view: Score: 7 out of 10
Some excellent tips there if you are a smoker. Try the first one first (giving up).
Life Insurance & Critical Illness Plan
Financial Advisers Advice:
Consider that when you originally set up your plan you will have done that for a set number of years. As time has gone by, you are now at a point where the new plan will be applied for a shorter period of time and as such the ...
Financial Advisers Advice:
Consider that when you originally set up your plan you will have done that for a set number of years. As time has gone by, you are now at a point where the new plan will be applied for a shorter period of time and as such the premium would normally be cheaper. Your extra age would, however, have an increase on the premium and you’ll need to take that into account. Either way its well worth your while asking your provider for a new quote to ascertain what you may save.
Expert view: Score: 6 out of 10.
Simple good advice. Make sure you use a trust with your life insurance to take the capital outside the estate and ensure speedy payment too.
Consider that when you originally set up your plan you will have done that for a set number of years. As time has gone by, you are now at a point where the new plan will be applied for a shorter period of time and as such the premium would normally be cheaper. Your extra age would, however, have an increase on the premium and you’ll need to take that into account. Either way its well worth your while asking your provider for a new quote to ascertain what you may save.
Expert view: Score: 6 out of 10.
Simple good advice. Make sure you use a trust with your life insurance to take the capital outside the estate and ensure speedy payment too.
'Worldwide Financial Planning Ltd are authorised and regulated by the Financial Services Authority. Worldwide is entered on the FSA register www.fsa.gov.uk/register/ under reference 440668
Registered office; The Old Carriage Works, Moresk Road, Truro, Cornwall, TR1 1DG. Registered in England and Wales No. 3533548. Contact info@wwfp.net or 01872 222 422
© 2007 Worldwide Financial Planning - this site is intended for UK investors only
By clicking on any of the external links within this website you will leave the regulatory site of Worldwide Financial Planning Ltd. Worldwide Financial Planning Ltd are not responsible for the accuracy of the information contained within the linked sites.'
Registered office; The Old Carriage Works, Moresk Road, Truro, Cornwall, TR1 1DG. Registered in England and Wales No. 3533548. Contact info@wwfp.net or 01872 222 422
© 2007 Worldwide Financial Planning - this site is intended for UK investors only
By clicking on any of the external links within this website you will leave the regulatory site of Worldwide Financial Planning Ltd. Worldwide Financial Planning Ltd are not responsible for the accuracy of the information contained within the linked sites.'