Bulletin 23, 2006
Round up
3 - the number of life insurance rate changes since the last bulletin, Bupa, Liverpool Victoria and Friends Provident
18% - the increase in life assurance business reported by Bright Grey compared to 2005
25 - the average number of days it takes to process a life insurance application (its 26 days for critical illness cover - just one day longer)
£74.70 - the agreed new cost of a GP report for a life insurance application
£199,184 - the average house price in England & Wales – which means life insurance must cost a bit more too!
Comments of the week
'The life insurance industry can tackle the issue of poor press and lack of public trust over claims, but it needs to do so with care. That means starting with the fundamentals, including law, life insurance policy design, consumer education and regulation. But we need to go further to make sure we can defend what we do and to set up systems that stop claims being rejected wrongly. We need to eliminate institutional untrustworthiness and that's bigger than just part of treating our customers fairly.'
Andy Couchman
Consultant and Protection Review co-editor
'It leaves a very bad taste when a life insurance or critical illness claim is turned down for non-disclosure when the matter has no relevance to the claim. Moreover, the life insurance companies must adopt robust underwriting processes that ensure that their dealings with typical, law abiding applicants, provide them with all relevant medical data. Current processes, with life insurance applications running to 20 or even 30 pages and presumption of detailed memory of conversations with GPs over many years, do not.'
Clive Waller
Senior Partner, CWC Research
Villain of the week
AIG Direct
Who are about to launch a new cancer only (critical illness or sorts?) insurance product in the UK on the back of their recent sponsorship of Manchester United. A number of personal finance journalists have been invited to attend the product launch, which features ex-players including Denis Law. Some of the journalists who attend will receive complimentary cancer cover of £25,000 for 12 months (we wonder if they will need underwriting?!).
Some have already said this is in bad taste and others have called it a sick gimmick. Either way when it comes to health and life insurance products there is a very fine line between what is clever marketing and what is poor taste and our industry must market its products responsibly.
That said, we haven't seen specific product details as yet but we understand it does include the counselling and care services provided by Red ARC, which can only be a good thing.
Hero of the week
Skandia Life
Who this week updated their paid and non-paid claims guide for critical illness cover. The new guide, which is in a consumer friendly format, shows that the company has paid over £159m in critical illness claims to date and that the average age of each claimant is 45. Skandia also confirmed they have now paid almost £1.4m in children's critical illness claims.
Paid claims account for 85% of all claims received, with 11% being declined for not meeting the definition, 2.5% for non-disclosure and 1.5% for 'other' reasons.
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