Payment Protection Insurance Cover

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Does your critical illness policy cover breast cancer?

Every year many women in the UK take out critical illness insurance cover, and most think that this will cover them if they are diagnosed with critical illnesses such as breast cancer, which could result in them being unable to work or earn an income.

However, recent research has revealed that critical illness policies do not provide cover or protection if the policyholder is diagnosed with a specific – and common – form of breast cancer known as ‘ductal carcinoma in situ’.

According to insurance providers, this is a form of breast cancer that is usually caught in its early stages and can therefore be treated, hence cannot really be construed as critical. Insurance companies also claim that the diagnosis of this form of breast cancer is so common that it would simply cost them too much to cover this particular form of cancer. However, for those with critical illness policies, who are then diagnosed with this cancer and unable to work, this is of no help at all.

One woman explained that she was diagnosed with the cancer, which is normally treated through major surgery or a mastectomy, and ended up having to sell her home and downsize in order to pay off her debts after being unable to work and earn money. She stated that when she tried to claim on her policy she was told that this form of breast cancer was not covered, but stated that she was never told this when policy was sold to her by NatWest.

An official from NatWest stated: ‘ Unfortunately, this policyholder’s illness is not covered by her policy. The brochures which she admits she received when she first took out the policy clearly state that there are exclusions to the type of cover the policy provides. They also emphasise the importance of checking the accompanying guide to serious illness cover for more detailed definitions of the cover.’

Tom Smith
28th September 2007

Norwich Union tried to catch out insurance customers

One of the UK’s leading insurance companies, Norwich Union, is targeting customers that hold critical illness insurance policies in order to try and find out whether they have withheld information in the past that could in effect mean that their policies are null and void.

The insurance giant is writing to five thousand critical illness policyholders to try and find out whether they withheld information when they initially took out their critical illness cover.

This is a pilot scheme being trailed by the insurance company, and the policyholders being questioned have been selected at random. However, if the scheme does prove successful then the insurance company is looking to widen the scheme to all two million of its critical illness policyholders. Critical illness cover has already been at the centre of controversy over recent years, as statistics show that around 20% of critical illness claims from customers end up getting rejected due to either incorrect claims on diseases that are no covered, or due to lack of information from the policyholder when the insurance was first taken out.

Critical illness cover is designed to pay out a lump sum to the policyholder in the event that he or she is diagnosed with one of the critical illnesses that are specified on the policy. The policyholder gets to keep the money even in the event that he or she goes on to make a full recovery from the critical illness. However, the level of rejected claims with this sort of cover has resulted in a great deal of negative publicity for critical illness insurance cover.

Norwich Union states that the exercise is to try and update all customer information before any claim needs to be made. One official from the insurance company stated:  ‘We want to be able to clearly advise people . . . how to proceed if they believe they may have missed something off their application form. We feel this is the right approach to try to help customers prevent non-disclosure in the event of a claim.’

Tom Smith
17th September 2007