Aegon Scottish Equitable says it is unlikely to follow Legal & General and abolish consumers’ requirement to disclose changes to their circumstances between the application process and the policy going live.
Aegon says it has an older client base than L&G and a significant amount of the claims it declines are rejected due to non-disclosure before the policy starts. L&G recently scrapped this rule but Aegon says eradicating this requirement is unfeasible for any firm without a majority of preferred lives.
Spokesman Mark Locke says if Aegon was to follow L&G’s lead, its risk would increase significantly due to its older customer base, whose health is more likely to deteriorate during this period, which could lead to price increases for all policyholders. Instead, it is improving its literature to make applicants’ responsibilities clearer.
Munich Re director of client management Andrew Francis says: “Where an insurance company has a younger book of lives and manages its pipeline quickly, logic says the cost of providing this guarantee will be smaller.”