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Critical illness payouts rise above 88% as non-disclosure plummets


The insurance industry has almost eradicated non-disclosure as a major problem.


Research by intermediary LifeSearch reveals that insurers are now paying out on over 88% of all Critical Illness claims on average, compared to just 84% when the last set of LifeSearch figures were published in October 2007.


For years, critical illness policies have been derided as the product where a claim is likely to be rejected. There are two reasons a claim can be rejected:

  • Not meeting the definition, which means that the condition is not covered by the policy or is not severe enough

  • Non-disclosure, where the insurer rejects the claim because the customer withheld crucial information during the application process


Of these two, non-disclosure has been the source of most complaints. The latest figures show only 2.5% of claims were declined for this reason. That compares to 8% in the last set of research published in 2007.


Matt Morris at LifeSeach says, “There are two important reasons for this fall. The first is the work of insurers who have put in place new classification systems that has increased paid claims. The second is the publication of claims statistics, which has served to highlight the areas where insurers needed to improve. Consumers are now seeing the benefits.”


Life insurance: News update: 10/08/2009


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