Norwich Union reports that critical illness payments in 2005 rose significantly compared to 2004.
Norwich Union payouts on critical illness policies increased to over £80m in 2005; almost a quarter higher than in 2004. In total 1,123 claims were paid and the average payout was about £73,000.
The top five causes for claims in 2005 were:
Heart attack 8.3%
Multiple sclerosis 6.9%
Heart surgery 2.5%
Almost nine times more men claimed for a heart attack than women, but twice as many women claimed for multiple sclerosis.
A typical critical illness policy had been in force for less than four years (average of three years and seven months) at the time of claim.
Norwich Union declined 12% claims due to non-disclosure of medical facts at policy outset and a further 11% of cases were denied as policy conditions were not met.
Louise Colley, head of protection products at Norwich Union, said: “People use critical illness policies to protect against the potentially financially devastating problem of contracting a critical illness. For most people critical illness policies are providing invaluable cover for people when they most need it. “
Norwich Union is striving to find new ways to reduce the levels of non-disclosure in policy document. Earlier this year they introduced a Full Disclosure factsheet in all information packs further underlining the importance of completing forms carefully, accurately and completely.
Critical illness cover can be an important contract for those concerned about protecting their finances in case of serious ill health. Not all policies are similar; they vary considerably both in terms of the cover provided and the reliability of the insurer. It is crucial that the decision to proceed is not based purely on price
Critical Illness insurance : News update: October 2006