Bulletin 06, 2006
Round up
Life insurance rate changes announced by Friends Provident and Legal & General. Tesco will now sell Direct Line's life insurance products, ending their 5 year partnership with Norwich Union.
Bright Grey report strong year of growth with life insurance sales up over 25% to £23.1m. Royal Liver launch Pension Term Assurance IFA microsite.
CI claim stats
18 months ago we began calling for life insurance companies to publish their paid and non-paid critical illness claims stats. Since then 10 of the leading life insurance companies have done so.
The key message is that 4 in 5 critical illness policies (and around 99% of life insurance policies) pay out as expected. The number of claims being declined for non-disclosure highlights the very real importance of completing the application form correctly and understanding what is covered as well as what is not covered. Our message to consumers has always been if in doubt - write it down.
We believe that over time the publication and communication of these statistics will see 4 in 5 become 9 in 10. However, now that we have the statistics we need to communicate them effectively to advisers and consumers.
Comment of the week
'Currently IHT is paid by just 6% of estates. However, the rapid rise in house prices has pushed millions more above the IHT threshold without them even knowing it. The average household wealth now stands perilously close to the IHT threshold and as many as one in three households could now face a 40% IHT bill. With this in mind it is vital that people take action. For many people it is possible to cut or even completely avoid IHT with just a few simple steps. The first and most obvious of which is to make a Will.’
Hero of the week
BUPA
Who this week published their critical illness claims statistics. BUPA Individual Protection paid out an average benefit of nearly £79,000 in critical illness claims since its inception. The largest sum paid was £750,000 for a permanent disability claim. In keeping with the market, the majority of claims have been for Cancer and Myocardial Infarction. BUPA has also paid claims for cardiomyopathy, chronic rheumatoid arthritis and insulin dependent diabetes. The average duration of the policy being in force was 33 months and its declined claims due to non disclosure were 8.4 percent of the claims received while 13.1 percent of claims did not meet the definition as described in the member's handbook.
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