Most professional advisers would advise their clients that the basis of insurance for families should be the various forms of protection. Just think of the things that could go awry accidents and illnesses do, unfortunately, happen when we least expect it. Early death, critical illnesses, accidents or cover for the awful day when you lose your job. Not so unusual any more!
Life insurance is main tool in financial planning for either insuring your mortgage or providing a lump sum to be used by the family should you die. It s a shame that some other types of protection insurance have had a bad press. Payment Protection insurance, for example, has suffered a reputation for being miss sold and critical illness insurance has been plagued with reports of so many exclusion clauses that people are very wary of it. Fortunately a lot of these issues have been addressed. Many of the main insurers have brought in a range of changes which are designed to reduce their rejection rates.
Take Critical Illness Cover: Beginning with a totally clear explanation of the importance of fully disclosing your medical details, going right through to your last consultation with your doctor. It doesn t matter how trivial the reason, they need to know everything. Some companies employ a medically trained person to phone each applicant and go through their medical history in detail. Other insurers remind their policyholders about the necessity of disclosing full health details and allowing them to re assess their details, at the time of taking out the policy. It s not just health, it s lifestyle too. If you re a smoker you re likely to pay a higher premium. You need to have given up smoking for 12 months before they ll be happy you re a non smoker and beware there are simple and inexpensive urine tests which you can be asked to take if there s any doubt. If you put non smoker on the form and on checking a doctor s report he has you down as a heavy smoker it s going to appear odd, to say the least.
Just a few years ago claims were being rejected if there was a possibility of anything being missed from the medical declaration. One major insurer tells us rejections came down from almost 7 per cent to 1.5 per cent in just six months.
In a similar way, payment protection insurance has had a re vamp and descriptions of just what is covered are clearly shown. With all insurances, it s essential that you are completely truthful when giving any details whatsoever. If you re not completely open about things and any claim in the future is refused because of this, then the family are going to suffer, not the insurers. Of course, it s possible to overlook details, or to think they re unimportant and for this reason the new way in which you re guided through the form filling is something to be welcomed.
If the measures which the insurers are taking, means that monthly premiums will rise slightly, then this will have to be accepted. After all, it better to be absolutely confident that your claim will be met after what could be many years of paying the premiums.
It s a shame that insurers didn t take this action years ago. Their slowness in reacting to the complaints has destroyed the public s idea of protection insurance and it will take some time to recover their confidence. Protection insurance is an invaluable tool in ensuring the family against financial disaster.
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