Summary
It is essential to explain the wording of policies, in particular those relating to critical illness cover. The innovative introduction of placing illnesses into types, which will provide clients a much better choice of insurance.

Very few people are covered against serious illness even though it may arise unexpectedly. Unum Provident, the income protection provider, has carried out studies that reveals only 5.2 per cent of the country’s work force own critical illness cover, even though they will receive a large sum if they have  a stroke, heart attack or suffer from cancer.

16 per cent of people believe the cover to be too expensive, the survey reveals, which give reasons for the low take up.

Would-be customers are also baffled by the phraseology of policies and the difference between permanent medical cover and critical illness cover.

An operational party put together by the ABI, is a present re-evaluating the  phrasing of policies. The situation could become much more  perplexing if the working party decides to lessen the amount of diseases defined as a critical illness ( e.g. cancer ).

Standard Life have introduced a new plan known as Elixia 123, which it claims cuts the cost of critical illness cover by about 25 per cent and sometimes by as much as 48 per cent.

This will be achieved by allowing clients to choose the illnesses for which they want insurance. There are 3 categories of risk. Category 1. Strokes, invasive cancer and heart attacks. The plan will only pay out if the illness leads to major life style changes or is life threatening.

Group 2. Conditions that do not have so much impact on life expectancy but do significantly affect life style. Motor neurone disease, blindness and Alzheimer’s  are incorporated in this group.

Group 3.  sufficient about critical illness to choose between the three levels of insurance. This is definitely the view of Miss F Price of independent financial advisers T Thatchers and Sons. She thinks allowingclients choose maybe dangerous as there is a large amount of  terminology in an insurance policy and the medical terms are difficult to understand. She counsels customers to choose the most comprehensive insurance as one is unable to foresee the future. Choose a lump sum payment equivalent to your mortgage is her advice.

Critical illness cover is not that costly so it is wise to go for a comprehensive plan, which will give you peace of mind.

Moria Jennings, the distribution development manager at PruHealth, is worried about how the terms are defined. She emphasises that consumers must understand exactly what they are purchasing. For instance, when is an illness defined as major? The first and the third categories need elaboration before buying insurance as there is not much difference between them in her view. Problems can occur later if the client has not fully appreciated the terms of the policy when they Susan Pilks.