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ABI will keep TPD name

The Association of British Insurers has agreed to keep the term “total permanent disability” ahead of the publication of its updated statement of best practice for critical illness, due early next year.

The TPD clause within CI policies accounts for 3 per cent of claims, but of those over half are declined due to confusion among consumers about when they can make a claim.

The ABI has been consulting with the industry and carrying out consumer research since 2007 on how to improve TPD definitions after it was given the go-ahead from the Office of Fair Trading to clarify when a claim would be

The trade body came close to scrapping TPD altogether before proposing in June this year to replace the term TPD with “irreversible life-changing disability.”

In the updated statement of best practice, to be issued early next year, TPD will be retained but will include clearer definitions and headings about what TPD covers.

By keeping the TPD name the ABI says the updated terms can be applied to both new and existing policies.

Assistant director of health and protection Nick Kirwan says: “We believe this package of measures will make a positive difference in reducing the number of declined claims. The whole industry will be using the same words
to mean the same thing.”


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Both the outcome and the ‘consultation’ are disappointing.

    The problem with TPD is the ‘T’. Clearly those clients with own or suited occupation do not have to be ‘totally’ disabled in order to succesfully claim.

    Another problem is that the activity-based definitions are sufficiently stern that many genuinely disabled clients cannot be accomodated due to the need to fail two or three of the activities.

    The final problem is the ABI itself. Having engaged with the industry – insurers, reinsurers and advisers – at the outset, they have deliberately ignored advisers in the final run-up to a decision being made.

    Many are questioning the relevance of the ABI and I am beginning to think similarly.

  2. ‘By keeping the TPD name the ABI says the updated terms can be applied to both new and existing policies’

    surely the intention is not for all ABI members to replace their wordings on existing/legacy policies with the new one? Or is it..

  3. And that is the problem with the whole process – once it disappears back into the ABI it becomes far from transparent, leading to rumour, myth and lack of clarity…

    We have had a statement to the press but the rest of us will have to wait a couple of months to see what the new SoBP contains.

  4. Agree the myth and lack of clarity arises from supposition by parties in advance of the SOBP or those seeking a few column inches of fame

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