Those needing to make a claim on their critical illness (CI) insurance should in future have a better understanding of their cover, following an updated Statement of Best Practice from the Association of British Insurers (ABI).

The new Statement takes account of past problems with the insurance and aims to improve understanding of Total Permanent Disability (TPD) cover in CI policies.

According to the ABI, TPD represents only 3% of all claims under CI, but a high proportion of those claims have been declined in the past.

To remedy this, the Statement includes a new set of standard definitions for TPD plus a change in the wording of the Terminal Illness definition (in the light of changing medical science), including changes to the Cancer and Parkinson’s disease definitions.

Finally, the pre-existing conditions exclusion for Children’s Critical Illness insurance has been standardised.

The ABI’s assistant director of health and protection, Nick Kirwan, comments: “The work on developing standard definitions for TPD and children’s cover will help ensure that critical illness policies are clear and pay out in line with customer expectations.”

ABI members will be required to implement the new wordings as soon as is practical, and no later than the end of 2012.

 

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