Critical illness insurance began on the basis that it was cover should someone get a horrible illness. Nearly every person was expected to die. The aim was to bring comfort in their final years and ensure they and their family did not suffer.
But, modern medicine has moved on. Not only do many critical illness sufferers live longer than 2 decades, but also some recover completely. Insurers are split between those who still see it as a ‘terminal illness’ policy and a much smaller number who accept that people can claim under the policy and recover.
Where both groups vary by insurer is the attitude to modern treatment that can find and treat a potential critical illness at early stages. Some argue that this type of treatment should be covered by a private health policy. Others feel it makes sense to pay out £20,000 to prevent an illness becoming critical, rather than allowing it to develop and pay out £200,000 when the situation is too late. Most insurers keep their heads down and hide behind the old tactic of stating that the customer should have read and understood all the policy - that’s a bit like your car mechanic refusing to repair your car and blaming you for not reading and understanding the 50-page manual in translated Japanese.
Every policy has different wordings, but in a claim situation, it is rarely ‘black or white’ much depends on how the insurer, or even individual people, interpret the wording.
That there are agreed ABI wordings does help, but also hinders as few individual insurers will go their own way and develop wordings that cover how the medical world is changing. Critical illness is the only health insurance where what insurers cover is mostly decided by an industry committee. Committee agreed wordings are at best compromises, and at worst stop individual development - you only have to read the veiled invective that established insurers pour on any company unwise enough to develop a radical alternative approach.
The premise is that you'll receive a pay out from your insurer, depending on how much you pay them, for a diagnosis of a critical illnesses within seven core areas; heart attack, kidney failure, major organ transplants, multiple sclerosis, stroke and cancer.
A problem area is cancer. Several recent cases have been reported where women have just been told they have got cancer, but also find out they are not going to receive any of the financial support they thought they'd paid for. That’s because they've been diagnosed with an early form of breast cancer called Ductal Carcinoma In Situ (DCIS). This is when a non-malignant tumour has been found, which has the potential to become malignant and spread, but because it is caught early is still contained.
An example - a woman was diagnosed with DCIS and as her form of cancer, while still in the 'in situ' phase, was also high-grade and therefore likely to become invasive. If this were allowed to happen she would stand a low chance of survival. She was given immediate surgery to remove the lump, followed by radiotherapy treatment to reduce the chance of the cancer spreading. Her claim was rejected because the type of cancer she had was excluded from her policy.
The women that get DCIS are put in an impossible position - they need to have the necessary treatment to remove it before it invades, but in doing so won't receive the money they need, because their critical illness policy only covers them if it spreads. That means if the cancer hadn't been detected, and had spread, they could have received a pay out.
It is standard across the industry to exclude carcinomas in-situ - cancers that haven't yet invaded surrounding tissue. Out of around 60 providers, offering a range of about 200 different versions of cover, there are few providers with products that pay out to policyholders undergoing mastectomies due to DCIS:
Skandia's Skandia Protect product pays up to £10,000
Fortis Life's YourLife Plan pays up to £25,000
PruProtect pays 10 per cent of sum assured
AXA's Protection Account pays up to £15,000 or 20 per cent
Unum's Elixia123 pays up to £25,000
Insurers maintain they're only able to offer cover for the conditions which are generally considered to be immediately life threatening - and because screenings for breast cancer find cancers before they reach a life-threatening stage, they say this means they don't count as a critical illness.
A typical insurer response is that cancer in situ is specifically excluded from critical illness cover, because there's a good possibility that cancer at this early stage will respond to treatment.