Summary
The outcome of advances in medical science on Critical Illness policies. The payback afforded by reviewable policies.

Premiums for Critical Illness Insurance are rising due to the rising amounts of claims and apprehension about medical advances in the future future. If you are diagnosed with a life threatening illness, Critical Illness Insurance gives you a tax free payout, which will aid you financially if your illness prevents you from working.

 Two top insurance companies will be elevating the price of insurance shortly. Scottish Provident’s payment will increase by 20 to 26 per cent and that of Swiss Life by 20 per cent. These rises are minute in comparison with the 52 per cent imposed by Friends Provident and BUPA and the 65 per cent announced by Norwich Union and Scottish Equitable. LV are still deciding what rise they will impose next month.

The insurance companies are in chaos as developments in medical science aid patients to recover from severe illnesses, which would have been life threatening only 12 years ago. The effect of this massive alteration in health insurance is that life insurance claims are decreasing whilst settlements on critical illness policies have observed a sudden rise. Therefore the cost of life insurance is dropping, whilst that of critical illness insurance is increasing swiftly.

In an effort to keep the price of premiums down, the AIB has altered the conditions under which insurance is offered for heart problems and prostrate cancer.

Many patients are now discovering that early recognition of these illnesses results in elongated life expectancy. The illnesses under which Critical Insurance policies settle are being redefined. This occurrence will help to reduce the number of claims and therefore slow down the speed at which payments are increasing. (For example), critical illness insurance will only pay out for skin cancer if it is invasive)

Karl Peters of broker’s Direct Line says that critical illness insurance policies at the moment cover illnesses, which are simpler to detect and treat. Claims are consequently being settled for non-life threatening illnesses, which is not the point of the insurance
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An evaluation of the conditions of many policies is expected sometime soon. Critical Illness insurance cover for diabetes is being removed by Standard Life, which leaves BUPA as the only insurer that incorporates this condition.

 Reviewable term assurance are at this moment being provided by an escalating number of insurers. Illnesses and pay outs covered by these policies are revised every 4 years. A typical Critical Illness Cover is a guaranteed insurance, which runs for a predetermined number of years. The payments stay the constant whilst the cover is in force, which is normally the length of their home owner loan. However this kind of insurance is becoming more pricey.

The Group Director of LV’s independent financial adviser division, James Keen says that you have to pay the price for the reassurance that a guaranteed insurance policy gives. He adds that customers are more likely to decide on a renewable rather than a guaranteed policy as the increase in costwidens. While Legal and General increases it’s CIC it is also introducing a reviewable policy therefore offering customer a choice. Skandia has withdrawn it’s guaranteed CIChave a guaranteed policy. He suggests that if you do not by now have cover it would be wise to take it out soon,| prior to any more changes being announced.