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Skandia rejects 2% of CI claims for non-disclosure

Skandia says only 2 per cent of critical-illness and death claims it receives are not paid due to non-disclosure of relevant information on application forms.

Overall, 79 per cent of claims see payouts. Eleven per cent of claims are not paid because the illness does not meet the definition of the policy and 8 per cent are withdrawn voluntarily by the client.

The figures relate to the year to December 31, 2004. This is the first time that Skandia has released protection payout figures, joining Standard Life, Friends Provident and Scottish Provident. Liverpool Victoria, Scottish Widows and Norwich Union all intend to publish figures this year.

Skandia has paid out a total of over 130m on 1,323 claims. Cancer accounts for 59 per cent of claims, followed by 14 per cent for heart attacks. The average age of claimants is 45.

Cancer is also the most common cause of claim for children, accounting for 69 per cent of claims. Skandia has paid out 1.2m on 65 claims for children, who are automatically covered in Skandia Protect at no extra cost.

The data is being released as a sales aid for advisers. Skandia says it is launching a tool on its extranet service which enables advisers to segment claims data by sex, age, occupation and claim type. Consumer guides have also been given to advisers to distribute to clients.

Protection marketing manager Alison Turner-Holmes says: “Non-disclosure of historical conditions on application forms is very rarely deliberate by the adviser or client. We believe our claims data can help financial advisers highlight the benefits of protection.”

Lifesearch senior technical adviser Kevin Carr says: “The other life offices which have five or more years of claims’ history – where are your non-paid claim stats? And what about income protection claim stats next?”

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