Leading critical illness insurers and their trade body propose to change the definitions of critical illness policies by 2010.
Not all insurers agree. Some intermediaries are concerned that the changes will cause as much confusion as they solve. Many feel that the chance of insurers changing wordings and systems within a few months is a pipe dream.
The Association of British Insurers (ABI) proposes an end to the automatic inclusion of a total and permanent disability (TPD) clause in critical illness (CI) policies in a bid to reduce the number of declined claims.
In suggested changes to its Statement of Best Practice for CI Cover, it says TPD should be replaced with a set of ‘carefully worded’ definitions to ensure clarity for consumers about which conditions are, and are not, covered.
The proposals follow concerns about the number of CI policies declined under the TPD clause. Although TPD accounts for only 3% of CI claims, the ABI says, more than half (55%) are turned down.
The ABI says it also wants to introduce a new model definition for ‘Loss of the physical ability to look after yourself' by introducing six new rules, three of which must be met by a claimant.
TPD is a condition now covered by most CI policies but, as it has no model definition, each insurer uses its own definition to assess whether someone has become totally and permanently disabled.