ABI launches consultation on Critical Illness Cover
by Gill Montia
The Association of British Insurers (ABI) has launched a three-month consultation on changes to its Statement of Best Practice for Critical Illness Cover.
The Association is proposing to replace the Total Permanent Disability (TPD) clause included in critical illness policies with a set of carefully worded definitions.
The aim is to ensure clarity for consumers about precisely what conditions are, and are not covered.
According to the ABI, the majority of critical illness claims are paid promptly as they are based on a straightforward diagnosis.
However, in the case of TPD (which accounts for 3% of claims) 55% are declined because the policy definition has not been met.
Research has also highlighted confusion on the part of consumers between income protection and critical illness insurance and the proposed changes should make the distinction clearer.
The ABI’s assistant director health and protection, Nick Kirwan, explains: “We’ve been in long and detailed discussions with medical experts about the causes of most Total Permanent Disability claims … we are confident that the new set of definitions provide clarity and a better understanding about what makes a valid claim.”