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Buying critical illness insurance is supposed to offer peace of mind for the moments when your world falls apart with a terrible medical diagnosis. But it transpires that the peace of mind can be anything but that, as insurance companies reportedly reject a staggering one in five claims.
How It Works
When you apply for insurance, you fill out a questionnaire about your medical history. Once that's completed and you begin making payments, most people assume everything is fine, and they're fully covered.
What they don't realise is that the medical notes of applicants aren't checked until they make a claim against the insurance, as the insurers say it costs too much to thoroughly check every single application. However, when you do claim, they'll go back and look at your doctor's notes. If there's a disparity between them and the answers you gave in the application questionnaire, they can, and very likely will, reject your claim.
Their right, under the law, is that if a customer fails to disclose information sought by the insurer, the provider can end the cover and reject a claim. However, the original questions can be very vague or confusingly worded. Even so, the company has the legal right to reject the claim if they consider the information to be inaccurate, whether deliberate or accidental.
In one recent instance, a cancer claim was rejected by an insurer. The reason given was that she hadn't disclosed the fact that she was diabetic. In fact she'd experienced gestational diabetes, a rise in sugar levels during pregnancy, a condition that affects one in 30 women during pregnancy; in other words, it's more a condition of pregnancy than an illness in itself. In most cases it vanishes after the birth. However, since the word diabetes appeared in her doctor's notes (which were reviewed when she made her claim) and she'd stated she'd never had it, the insurer felt within their legal rights to reject a claim for a different and unconnected condition.
How To Avoid It
About the only way to avoid a rejection is to be utterly honest. Make an appointment with your doctor before you fill out the application and go through the questions thoroughly. He will have your notes in front of him and can check for any mention of conditions.
If that isn't possible, scour your memory as much as possible. If you're not certain about something, it's probably better to put yes rather than lose coverage later.
If You're A Victim
If your claim is rejected, it can seem devastating, and it is. But there are steps you can take if you believe the company has acted in bad faith.
First, challenge the decision. Most companies have procedures in place to allow that. Gather your paperwork, do your research and make your case logically. In some instances, the decision will be reversed.
However, if a challenge doesn't work, you can always take your case to the Financial Ombudsman Service. Fill out their downloadable complaint form and return it, following instructions. They will look into the matter and reach a decision. Their criteria are different from the insurance companies. They'll establish whether the consumer lied deliberately on the application, or whether the omission was reasonable because or the way in which the questions were asked.
If all else fails, you can take the insurance company to court. Be warned, however, that it can be a lengthy, expensive procedure. One case that was resolved recently (in favour of the individual, not the company) dragged on for six years.
How It Works
When you apply for insurance, you fill out a questionnaire about your medical history. Once that's completed and you begin making payments, most people assume everything is fine, and they're fully covered.
What they don't realise is that the medical notes of applicants aren't checked until they make a claim against the insurance, as the insurers say it costs too much to thoroughly check every single application. However, when you do claim, they'll go back and look at your doctor's notes. If there's a disparity between them and the answers you gave in the application questionnaire, they can, and very likely will, reject your claim.
Their right, under the law, is that if a customer fails to disclose information sought by the insurer, the provider can end the cover and reject a claim. However, the original questions can be very vague or confusingly worded. Even so, the company has the legal right to reject the claim if they consider the information to be inaccurate, whether deliberate or accidental.
In one recent instance, a cancer claim was rejected by an insurer. The reason given was that she hadn't disclosed the fact that she was diabetic. In fact she'd experienced gestational diabetes, a rise in sugar levels during pregnancy, a condition that affects one in 30 women during pregnancy; in other words, it's more a condition of pregnancy than an illness in itself. In most cases it vanishes after the birth. However, since the word diabetes appeared in her doctor's notes (which were reviewed when she made her claim) and she'd stated she'd never had it, the insurer felt within their legal rights to reject a claim for a different and unconnected condition.
How To Avoid It
About the only way to avoid a rejection is to be utterly honest. Make an appointment with your doctor before you fill out the application and go through the questions thoroughly. He will have your notes in front of him and can check for any mention of conditions.
If that isn't possible, scour your memory as much as possible. If you're not certain about something, it's probably better to put yes rather than lose coverage later.
If You're A Victim
If your claim is rejected, it can seem devastating, and it is. But there are steps you can take if you believe the company has acted in bad faith.
First, challenge the decision. Most companies have procedures in place to allow that. Gather your paperwork, do your research and make your case logically. In some instances, the decision will be reversed.
However, if a challenge doesn't work, you can always take your case to the Financial Ombudsman Service. Fill out their downloadable complaint form and return it, following instructions. They will look into the matter and reach a decision. Their criteria are different from the insurance companies. They'll establish whether the consumer lied deliberately on the application, or whether the omission was reasonable because or the way in which the questions were asked.
If all else fails, you can take the insurance company to court. Be warned, however, that it can be a lengthy, expensive procedure. One case that was resolved recently (in favour of the individual, not the company) dragged on for six years.
