Critical Illness Insurance. Big changes on the horizon
In recent years sales of critical illness insurance have flagged. Theprimary cause is the huge 70% increase in premiums experienced during
recent years. For many, critical illness insurance has simply priceditself out of the market.
It's not that critical illness insurance is a bad idea. After all itpays out a lump sum if the policyholder is diagnosed with one of the
many critical illnesses listed on the policy and the policyholdersurvives at least 28 days from diagnosis. (Note: some policies have a 14
day survival period.) Most policies have a huge list of insuredillnesses although about 60% of claims are for cancer - not surprising,
as 1 in every 3 people will develop cancer sometime in their lifetime.In fact when you look at the concept of Critical illness insurance you
can easily make a case that everyone living on earned income should havea policy. It's designed to give you a pot of capital to live on if
serious illness prevents you from working normally.
Critical Illness Insurance
Premiums have increased dramatically because medical advances have meantthat many illnesses that proved fatal in the past are becoming quicker
to detect and easier to treat. Hence insurance companies have foundthemselves paying out earlier on claims and on illnesses which are not
necessarily debilitating - which was the original purpose of criticalillness insurance.
To give you a better idea of the sort of illnesses we're talking about,here's a typical list:
Insurance companies have at last realised that they're not going to getanywhere marketing policies that people can't or won't afford, and where
the companies can't afford to lower prices. So it now looks as ifinsurers such as Scottish Widows are considering a break through -
splitting the cover so that the prospective policyholder can specifywhich illnesses he or she wants to insure against. It's a form a "menu
pricing" - cover for each illness would have a price and you simplyselect which illnesses you want to insure against.
Whether such insurance proves popular will very much depend on the cost.For example, if cancer accounts for around 60% of current claims, you'd
expect the premium for covering cancer alone to be about 40% cheaperthan a full strength critical illness policy. We'll have to wait and see.
The Price of Critical Illness Insurance
If you're interested to find out how much a standard critical illnesspolicy would cost you, you'll find it cheapest on the Internet. The best
sites to look out for are the independent discounting brokers who dealwith all the big insurance providers. These brokers can search the whole
market for you, come up with the cheapest insurer, and discount theirprice. Try to use a broker who'll also give you personal advice on the
phone as some policies do vary in the scope of their cover.
Michael writes for Scrouge Life Insurance who offer < life insurance quotes andcritical illness insurance. Click here for more [l="http://www.scrouge-online.co.uk/faqs/faq-home.htm]life insurance
Written By: Michael ChallinerCopyright: 2005
Contact Email: Michael@andromedawebs.co.ukContact Phone: 01477 535919
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