Do you remember school reports? How often did they say, " Could do better if worked harder”?
Insurance providers get a version of school reports, with reviews from financial regulator the Financial Services Authority
(FSA), their equivalent of teacher, but with a much bigger stick.
The FSA says companies selling critical illness protection are getting better, but need to do more. They must show they are treating customers fairly and help them to have a better understanding of the product
No company is allowed to sell you critical illness cover by scaring you with statistics on cancer and heart disease. The FSA says companies are no longer scaring consumers into buying the insurance. Just like teacher, the FSA makes "suggestions”, which roughly translated means " do this or you are in trouble "
Make sure customers disclose relevant medical information.
Explain critical illness much better
Make documentation clearer. Documents should clearly set out the benefits and limitations and exclusions under the critical illness policy
Critical illness protection pays out a lump sum if a person is diagnosed with certain specified medical conditions.
The FSA helps customers by pushing companies to give better advice and better products. Customers need to know whether critical illness is for them or whether they would be better off buying term life insurance, private medical cover or income protection instead.
Whether you go direct to an insurer or use a professional advisor, it is worth finding out what the various types of cover can do in general. Looking at several insurance provider sites is a big help. You wouldn't buy a car without studying information on the makes and models available, so do the same with whatever type of health insurance you are interested in.
Critical illness cover: News update: June 2006