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Summary
The outcome of progress in medical science on Critical Illness insurance. The payback afforded by reviewable insurances.

payments for critical illness are increasing due to the expanding amounts of claims and apprehension about medical improvements in the future future. If you are diagnosed with a life threatening illness, CIC pays you a tax free payout, which will support you financially if you are off work due to illness.

 2 top insurance companies will be elevating the cost of cover soon. Legal and General’s payment will rise by 20 to 27 per cent and that of Standard Life by 19 per cent. These rises are insignificant when compared with the 52 per cent imposed by BUPA and Friends Provident and the 61 per cent announced by Norwich Union and Scottish Equitable. Liverpool Victoria are still deliberating what increase they will enforce next month.

The insurance companies are in turmoil as developments in medical science help patients to survive serious conditions, which would have been terminal only 12 years ago. The result of this huge alteration in health insurance is that life insurance claims are decreasing whilst pay outs on critical illness policies have seen a sudden rise. Consequently the cost of life insurance is going down, whilst that of critical illness cover is increasing rapidly.

In an effort to keep the price of premiums down, the AIB has amended the conditions under which insurance is offered for heart problems and prostrate cancer.

Many patients are now discovering that early detection of these conditions results in longer life expectancy. The illnesses under which Critical Insurance policies make a pay out are being redefined. This change will help to lower the amount of claims and subsequently slow down the rapidity at which payments are increasing. (For instance), critical illness cover will only pay out for skin cancer if it is invasive)

Freddie Harrrison of broker’s Direct Line says that critical illness insurance policies at the moment cover illnesses, which are simpler to diagnose and treat. Claims are therefore being paid out for non-life threatening conditions, which is not the of the policy
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A review of the conditions of many policies is expected in the future. CIC for diabetes is being taken away by PPP, which leaves BUPA as the only insurer that incorporates this condition.

 Reviewable life assurance are at this moment being supplied by a growing number of insurers. conditions and pay outs covered by these policies are examined every few years. A standard CIC is a cast iron policy, which carries on for a predetermined number of years. The payments stay the constant whilst the cover is in place, which is usually the length of their home owner loan. On the other hand this kind of insurance is becoming more costly.

The Group Director of Friends Providents’s independent financial adviser division, Justin Myers says that you have to pay for the reassurance that a guaranteed insurance policy offers. He adds that customers are most likely to decide on a renewable rather than a guaranteed policy as the increase in pricebroadens. While Aviva raises it’s Critical Illness Insurance it is also introducing a reviewable policy thus giving customers a choice. Royal London has withdrawn it’s guaranteed CIChave a guaranteed policy. He recommends that if you do not already have cover it would be a sensible to take it out soon,| before, any further changes are announced.