Have you been declined a claim for Life Insurance, Critical Illness Cover or Income Protection Cover?
If you have been declined or had a decision “deferred” for a claim under a life policy, critical illness policy or an income protection policy it’s difficult to know where to turn. Maybe you have concerns about a policy you were sold, or are simply looking for support when submitting a claim.
That’s where Beat the Banks can help. With our experience and knowledge, we’re there to fight for justice on your behalf. All it takes is a call to our office on – 01382 200474, or simply fill in the enquiry form and we’ll be in touch to discuss your concerns.
The Truth About Successful & Declined Claims
Life insurance, Critical Illness Cover and Income Protection are types of insurance to protect both the policyholder and their immediate family in the event of death or the onset of a critical illness. Income Protection Cover is aimed at providing a monthly income when the policyholder is off work ill. It’s suitable for both the employed and self-employed.
Like every type of insurance, you hope that we will never have to claim against the plan but when you have to it can often be very stressful, especially following the death of the policyholder or the policyholder being diagnosed with a critical illness or being left with the prospect of being off work for a period of time due to a short term or worse, long term illness.
Currently, the Association of British Insurers, (ABI) advertise that they pay out on 97.6% of all claims however like everything else, you have to look behind the figures. For example what they don’t say is that over 50’s plans, which are guaranteed whole of life cover, make up something like 60% of all the personal insurance claims.
Official figures show that every year in the UK around £260 million of claims are officially declined. In other words, policyholders who have tried to submit a claim themselves but have been rejected.
Not included in that are the number of policyholders who are rejected even before an official claim is submitted, for example –By the insurers telephone team.Where a deferred decision is made (for example where a Critical Illness is not currently considered of sufficient severity to justify a payout under the policy’s terms and conditions).Non-disclosure on the application. Often resulting in the policy being cancelled and the premiums being refunded.
If you can look at the true figure it’s more likely to be somewhere in the region of an incredible £850 million every single year. It’s estimated that in the last five years alone something like £4.2 billion worth of these type of claims have been declined.
How Beat the Banks Can Help
Beat the Banks are here to help if you’ve been declined or had a decision deferred. Let’s look at exactly where even if you were declined a number of years ago we can still offer help and even in some cases where your claim was also rejected by the Financial Ombudsman (FOS)Your case was declined or deferred on a technicality within the policy wording. We can often challenge the reasoning. Close to one in ten critical illness claims are declined in the UK every single year. More often than not the rejection of the claim is due to “not meeting the definition of the policy.” For example only certain arteries being involved in a heart attack or a cancer not being sufficiently serious in terms of the Gleason scale or that the cancer doesn’t have enough nodules, or that simply the differential in the cells doesn’t strictly meet the policy criteria.You were declined for a material “non-disclosure.” We look to appeal by analysing the condition and the impact of “inducement”on the insurance contract. We also fully investigate how the health questions were answered on the application form and the reasoning behind why the policy was sold. For example was it a replacement policy.Deferred Terminal Illness or Critical Illness claims. Policy holders can have claims deferred until for example, further treatment has taken place. Our job is to compare the medical information, treatment types and prognosis in relation to the policy T&C’s.Not meeting the policy definitions. In the case of Critical Illness and some income protection policies, claims might not “satisfy” the policy conditions. This can result in policyholders being rejected during an initial call to the insurer’s telephone team. We tend to look at what’s “fair and reasonable” from the insurers perspective and also at the technical aspects of the policy.The financial adviser arranging your policy may have intentionally or unintentionally provided incorrect information on the policy application. For example non-disclosure of pre-existing medical conditions or even family illnesses. Unfortunately, some less scrupulous brokers chose to “churn” policies even after customers had been diagnosed with certain conditions.Your policy was allowed to lapse and your claim was declined on the basis that the policy was already cancelled due to non-payment of premiums. Illness can, unfortunately, affect peoples judgement and as a result of the ability to manage their finances effectively.You provided the correct information to your broker in relation to your own personal health or family history but this information was not correctly passed on to the insurance company.Finally, it’s been normal practice for some years now for insurance companies to send customers a copy of the proposal as submitted to them. We would urge consumers to view these closely. Unfortunately, some brokers with an eye on the commission would ensure that certain material and basic facts were incorrectly quoted in order that the policy be put in place without any time delay and in turn a delay on their commission being paid. A typical example being height or weight not being correctly stated.
Our principal aim is for the insurers to agree to the claim in full plus any possible compensation and interest. If this isn’t viable we would look at the way the sale of the policy was conducted.
In the event the claim continues to be declined, it’s then a question of us looking to have the premiums being refunded if the decline was identified as being due to a material “non-disclosure.”
If you’ve been declined for a claim in respect of Life Cover, Critical Illness or Permanent Health Insurance (Income Protection Cover), Beat the Banks are here to help.
To find out more call our expert team on 01382 200474 or complete our enquiry form and we’ll be in touch.
We are also more than happy to review existing policies to see if they are fit for purpose and would payout as promised in the event of a claim.
This is the most basic type of insurance designed to pay out in the event of death or on the diagnosis of a terminal illness meaning that the policyholder is projected to die within one year.
These type of policies can be sold in many different ways. For example, the life cover can be a constant figure over the policy term it can also increase with inflation over the policy term or finally it could decrease over a period of time. In the latter case, this would typically provide cover for a repayment mortgage.
Other pure life policies include Relevant Life plans. Typically these might be used to offer protection to directors of private limited companies. Similarly, there are other types of key man insurance. Finally, on a personal basis, you have a Family Income Benefit. Generally cheaper to take than level term insurance, it’s designed to pay a set amount of money for a set number of years.
Critical Illness Cover.
Being diagnosed with a critical illness can have a catastrophic effect on your finances. It can mean being unwell for a period of time and being unable to work or in the worst-case scenario being unable to return to work. In the interim bills still have to be paid and mortgage payments met.
Critical Illness Cover has evolved dramatically especially since 2003. Initially cover centred around cancer heart attack or strokes, whereas now there is a much greater number of illnesses and conditions covered within a standard contract. Recent policy upgrades have seen the number of conditions covered raised from 30 or less to 50 or 60 or in some cases, as well as some plans covering over 100 different types of conditions. Claiming under your Critical Illness Plan can lead to a full payout of your sum assured depending on the illness you have been diagnosed with or partial payment for a less severe condition or a set amount for specific additional or enhanced conditions depending on the policy you have for example many companies now make an additional payment should any of the policyholder’s children suffer a critical illness typically from birth up to aged 18. Some policies also pay out a set percentage of your sum assured depending on how severe your condition is.
As with pure life cover, critical illness can be taken on a reducing basis or on a level term basis or indeed that it increases in line with inflation.
Permanent Health Insurance
Permanent Health Insurance or Income Protection Cover is all about protecting your income over a set period of time.
Unlike Accident Sickness and Unemployment insurance that might have typically been sold in the past by banks to cover loans, credit cards and mortgages, permanent health insurance (PHI) is based on whether the policyholder is male or female, their age, their employment and occupation, their health, whether a smoker or non-smoker and finally the selected deferred period. Deferred periods are normally selected to dovetail with existing workplace benefits. For example your employer my offer to cover your salary fully for a period of six months in which case you would select your cover to start paying your benefit at that point.
Unlike Accident Sickness and Unemployment insurance which can be cancelled by the insurer at any time. PHI is exactly as it says. It’s permanent until cancelled by the policyholder.
Unfortunately, it’s also one of the most mis-sold financial products. People who believe that they are adequately covered may have been sold policies that are all but useless and that simply will be impossible to claim against. In terms of PHI, there are five different occupation classes these range from classes 1 to 4 and then house person. In the case of occupation classes 1 to 2 then any payment for ill-health is on the basis of their inability to do their own specific occupation. Typically covered under class one and two would be for example office workers. When you come to occupation classes three and four it’s a totally different story. In occupation class 3 you would expect to find for example teachers and hospital workers. For occupation class 4 this could be typically tradesmen.
It’s very much the case that insurers don’t like covering these occupation classes and claims may only be met based on the policyholder’s inability to perform any occupation, or worse still, certain “daily living” tasks. The interpretation of these “tasks” can vary significantly between insurers. Typical “task” failures are the inability to hear conversational speech in a quiet room, understand simple messages and speak with sufficient clarity to be heard and the perennial favourite, being unable to walk a short distance (sometimes even with a stick).
Whole of life Insurance Plans
Whole life is a type of life insurance contract that provides insurance coverage of the policyholder for their entire life. Upon the death of the insured life, the insurance payout is made to the nominated beneficiaries. Some policies may include a savings component, which accumulates a cash value.
Whole of Life insurance premiums are more expensive than a traditional term assurance policy, as much three to five times more expensive at least at the start of the plan. Term Assurance plans last a specific term for example usually 20 or 25 years before the policy expires. The younger you are and the better health you are in when you take the plan out then the lower the cost. When the term assurance expires then you will have to obtain new cover based on your age and health at that time, therefore, this will mean a much higher premium.
Whole life insurance premiums in contrast while higher initially, never go up. The policy is meant to last your entire life and as long as you keep paying the monthly premiums, the policy will continue to be in force regardless of age and health.
Monthly premiums for whole of life plans can be required to be paid until the date of death of the insured person or in some cases to a set age – for example, age 90.
There are many different types of Whole of life plans including the popular over 50 plans which are marketed for covering funeral expenses and leaving a lump sum to your family and advertised directly over television, media and in retail establishments like supermarkets.