June 28, 2009
Critical Illness Cover – Do Insurers Get it Wrong With Claims? – Hot Topics Q & A
Q. I'm looking to purchase life cover and critical illness cover. How often do insurers wrongly turn genuine claims down?
A. This is a great question as some people's perception is that insurance companies set out to try and turn down claims whenever possible.
Let's look at some numbers…
In 2007 and 2008 (combined) there were 56,000 claims for life and critical illness cover. Out of these, the number of claims referred to the Financial Ombudsman Service (FOS) that found in favour of the consumer was just 90, according to the Reinsurance Group of America.
This suggests insurers get claims decisions 'wrong' in just 0.16% of cases. In total, insurers paid out nearly £2bn in 2007 and 2008.
Insurers that took part in the survey included Axa, BUPA, Friends Provident, Norwich Union (now Aviva) and Zurich Life.
The FOS found in favour of the insurer in 66% of cases in 2007 and 63% of cases last year. The FOS has also said that a number of cases are outstanding.
On the positive side, acceptance rates for life claims stood at 99.1% in 2008. The critical illness claims acceptance rates stood at 88.6%.
So yes, whilst insurers do turn claims down, our experience is that they will treat genuine claims in a profession manner. And if you are turned down, you can always turn to the FOS for help.
Other Related Posts
Filed under Protection, Q&A by Ray Prince
