The Association of British Insurers is seeking to cut the number of rejected critical illness claims by providing tighter definitions in its latest code of best practice.
Research into customer requirements identified a need for further clarity, especially with regard to the effect of taking a partial or additional payment on the overall sum assured.
The ABI has now clearly stated that additional payments do not reduce the overall sum assured, whereas a partial payment does reduce the amount of benefit remaining.
A new definition for heart attacks has also been included in the best practice code, to help clarify when a claim will be paid and limit the number of unpaid claims.
Definition changes to benign brain tumour, less advanced cancers, coma, kidney failure, Parkinson’s disease, stroke and terminal illness have also been codified.
Protection providers are expected to implement the new code by December 2015.
ABI head of protection Helen White says: “The updated critical illness statement of best practice will mean customers have a much clearer explanation of what their policy does and does not cover when they buy it and if they need to make a claim that it meets their expectations. This in turn should also lead to fewer declined claims.”
Aegon UK protection director Dougy Grant says: “We welcome the ABI’s new statement of best practice for critical illness protection and the impact it will have on the number of claims paid. We will have these changes implemented well before December 2015.
”Our goal is to ensure people include protection in their financial planning so they have a safety net in place should the unthinkable happen. Despite a reduction in declined claims, trust continues to be an issue for customers when it comes to protection. Hopefully these new guidelines will help us as an industry give more people the confidence to put the right protection in place.”