Non Disclosure on Life and Critical Illness Insurance

[Inca]

Re: Non Disclosure on Life and Critical Illness Insurance

Thanks Tuttsi - there was I assuming I would have to be a well behaved puppy until I was offered such a tasty biscuit! :-)

Charlie,,I'm there !! Says it all really msl:

[Eloise01]

Re: Non Disclosure on Life and Critical Illness Insurance

I have to say that I read both threads on this with interest last night, it not being something that I had ever really thought about before (not insurance per se, but the subject) and I am sure that there are lots of others better qualified to comment on it than I. But one thing that does occur to me is that I see lots of adverts for such insurances which have, somewhere, in big letters "No medical required" or words to that effect. I think this encourages people who are inclined to lie to lie! And it means that people who have misunderstood something or made an ommission they don't realise have no counter checks. So for what it is worth, my opinion is that GP's should be required perhaps for a fee (which I think the company ought to be able to pay from their profits!) to check and countersign applications as an accurate reflection of their patients condition. Any doubt about something being serious enough to mention should thereby be alleviated - if a GP isn't worried that "pins and needles" is onset MS rather than the fact that they just have pins and needles, then how on earth would a non-medically qualified person filling in a form know to worry about it or mention it?

I also think that an ommission (not a lie like saying you don't smoke when you do) should only invalidate a policy that has been accepted if it is directly relevant to the condition being claimed for and if it is something that any reasonable person should have known to mention. I know that last bit will never be a precise science and still leaves loopholes, but I don't think there is any way of closing all loopholes.

[Inca]

Re: Non Disclosure on Life and Critical Illness Insurance

You make a very valid point Eloise. One thing that happened to me is this....for my entire adult life I have suffered 'hormonal' migraines,,once a month,every month for 38 years.I have also had low blood pressure all my life (90/55 on a good day).
So,,,,,,,,my migraines remain,my dizzy spells get worse (put down to MS). Now,just by chance my Dr checks my BP to update my records and it's 154/98!! She goes and gets another machine and it's still sky high! I'm immediately put on pills to regulate it and remain so to this day.So,in my case,every time I filled in my insurance forms I honestly put down I had no blood pressure problems,(rectified now) but had I fallen of my perch BEFORE I knew I had BP problems of a stroke or whatever caused by high BP would I have been paid out?

[MissFM]

Re: Non Disclosure on Life and Critical Illness Insurance

I've been thinking about this a lot and have read and re-read both threads - which do essentially revolve around the same issue. It's not easy, is it?

I thought I had a light bulb moment when re-reading Charlie talking about making it uniform, on the NI model (other thread) but of course that wouln't work or be fair because this type of insurance involves pay outs (money) rather than health care.

It's very frustrating. I'm sure there must be, if not the answer, a better way.

Lots of good brains here - someone must have some truly innovative good ideas?

[Charlie505]

Re: Non Disclosure on Life and Critical Illness Insurance

Thanks Eloise - some really interesting things to consider here.

The ‘no medical required’ type of insurance is what is called ’Over 50s cover’. The product is designed so it doesn’t ask medical questions. The cover levels are low and it assumes a proportion of the applicants aren’t very well. It is a way that the elderly can get some cover for funeral expenses – but if you are in good health, it is unlikely to be the best deal for you. It doesn’t really provide a solution for non-disclosure – unless you think the young and healthy should be charged the same as the old and infirm (and then that’s a social service rather than insurance!)

GPs reports are requested only when the cover requested is over a certain level or something adverse is disclosed on the application. GPs do get paid (significant amounts) for these reports – it is a business overhead like any other. The problem with asking for them all the time is that any expense (in any industry) affects how keenly the products can be priced. Besides, if everyone had to have a GP report it would means that customers would have to get used to waiting weeks to get their application agreed.

The most challenging point you have made is the last one – that an omission should only count if related to the condition claimed for. It is a point that has been raised more than once on the Nic Hughes thread and it’s a difficult one to explain, but basically when an insurer agrees to give you cover they are having to find capital to back the risk of all the things which (in retrospect) turn out not to occur, as well as the thing that does. I don’t see how it would be possible to calculate a premium if you based it on the premise that the applicant could lie about anything they didn’t mind being invalidated after the event. But if you could, you would have to assume that every customer was lying about something (not a great basis for a relationship) – and investigate every claim by asking for a GP report to see if the thing they claimed for was something they had lied about. I think FOS would expect a flood of complaints!

[Charlie505]

Re: Non Disclosure on Life and Critical Illness Insurance

OK how about this?

There is actually an industry code of practice on non-disclosure. It goes beyond what the law requires – and although the industry has voluntarily agreed it, FOS takes it into account when it looks at disputed cases. The code says this ...

There are three types of non-disclosure:

1. Where it is innocent – an honest customer failing to disclose something that a reasonable person wouldn’t consider relevant ...the claim should be paid
2. If it is negligent – where the customer didn’t use reasonable care and a reasonable person would have known the information was relevant (i.e. oversights and mistakes) ...pay part of the claim
3. If it was deliberate – the person had no care about something they must have known to be incorrect and relevant ...decline the claim and cancel the policy from its beginning

However in assessing a claim a key consideration will be the nature of the question. Where a question was concise and clear the customer should be expected to understand it is relevant to the insurer and answer it with proper care to the best of their knowledge and belief. However, not so much weight should be given to questions that are non-specific memory tests.

It’s not a perfect science of course but does the above strike you as fair and reasonable practice? Or could it be improved upon?

[Charlie505]

Re: Non Disclosure on Life and Critical Illness Insurance

The new Consumer Insurance Act comes into force today

This Act is the first change to the law on non-disclosure since 1906. Insurers have improved paractice over the years, and there is an industry code in place already which has much the same effect as the Act - but the law needed to be updated. It applies to all personal insurances - car,home,life,annuities, and critical illness.

Your insurer will now have to ask you specific questions to get information about your circumstances when you buy insurance. The Act will protect you if you unknowingly give wrong/incomplete information - and your insurer can't decline a claim due to non-disclosure unless you carelessly or deliberately lied or misrepresented.

However insurers can still decline a claim if you deliberately, recklessly or carelessly gave incorrect or incomplete information when answering questions so you still have a duty to answer questions correctly. (If unsure you should get advice). The Act describes what 'careless' or 'reckless' and expects you to take reasonable care to avoid misrepresenting your circumstances when answering questions.

[CISL]

Re: Non Disclosure on Life and Critical Illness Insurance

I was interested to read about the points discussed here regarding the difficulty some people are having in obtaining settlement under Critical Illness insurance policies. Unfortunately, in our experience, such problemsare far from uncommon.

We are very much aware that alarge number of people are experiencing real difficulties in having theirgenuine critical illnesses claims processed due to a variety of reasons. Theserange from an unnecessarily complicated insurance process, through to beingunsure if they are covered or simply not having the confidence to face thisbattle when they are feeling most vulnerable.

And whilst the insurers willrightly tell you that they settle over 90% of all claims they deal with, theunderlining statistics of how many eligible cases that do not get that far aresizable and by far outweigh those of the cases presented.

We are a commercialorganisation, but very much operate in an empathetic, sensitive and caringmanner, at no time do we put you under any pressure nor do we simply discardyou. Fortunately, there are a number of ways in which we have been able toassist people, even when their initial enquiry to the insurer wasrejected. This has meant we have been able to have help our clients turn theirlives around again and at the very least restore their financial position towhat it was before their illness. We are here to help you, Support you andwhere ever possible find a solution that works best for you.

Should you feel you would likeus to provide you with support or carry out a free no obligation assessment ofyour case, then please contact us. You can do this via email at info@criticalillnesssupportline.co.uk , by free phone on 0800 328 1906 or you can visit ourwebsite www.criticalillnesssupportline.co.uk for further information on the support services weoffer.