Posts Tagged policies
Is Critical Illness Insurance As Good As It Implies?
Posted by admin in Critical Illness, Life Insurance on September 3, 2009
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.
Mis-Selling Of Payment Protection And Life Cover Policies
Posted by admin in Life Insurance on August 27, 2009
Summary
The ways in which the insurance industry is dealing with mis-sold life insurance policies. The difficultiesassociated with payment protection policies are emphasized.
The mis-selling of life insurance cover by a significant amount of mortgage lenders has to be addressed by the Government. Steps have been taken by the DTI, who have almost completed their investigationinto the tie in of home and contents insurance with mortgages. A press releaseforbidding the practice is Mr Southgoes on saying that although lenders may not insist on customers taking out life insurance, they can be convinced that they have no choice through the provider being evasive with the truth.
55 per cent of life cover is sold by mortgagelenders, however it can be bought through independent advisers, direct providers or via the internet.
Then again a DTI spokesman has said that their investigation continues into a massive range of insurance lock ins. A lender who met Jonathon Shaw has said that life cover has been looked at in passing , while more importance has been focused on home and contents.
The problem with customers being forced to buy uncompetitive life cover and home insurance plans is just as essential for both commodities.
The concerns are especially severe with PPI. Around 1/2 of all consumers who have been swayed into taking out a payment protection insurance may have been provided with the wrong type of insurance. In addition the majority of those who purchased one of these debatable insurances expect much more than they would in truth collect if they were unable to pay their bills.
An extensive analysis has found that about 25% of the population believe that they will receive a monthly income from their Payment Protection Insurance policy, not understanding that the insurance would only cover their debts.
Another 15% said they understood the policy would cover them if they if they were unable to meet their repayment commitments for any reason, and six per cent said they thought their medical costs would be paid if they fell ill .
Several people thought the insurance would carry on indefinitely to meet their ongoing debts, others thought their policy would cover breakdowns and living expenses.
Annual sales of Payment Protection Insurance policies are said to create premiums of about 5.4 billion pounds for the finance business. However a stunning 3 9 billion pounds of this is said to be sheer profit. Analysis suggests that a number of banks can charge up to five hundred per cent more than others for similar.
The OFT is examining the sale of Payment Protection Insurance preceding complaints from the National Consumer Council and Citizens Advice. It recently empasized disquiet that banks are enticing customers by advertising seemingly cheap loans and then hammering them with massive extra costs by selling pricey Payment Protection Insuranceas part of the deal.
As a result, a loan which seems to give good value turns out to be far more expensive.