One of the myths around critical illness insurance is that insurance companies will wriggle out of paying claims and, therefore, some people will use this not to consider effecting the protection in the first place.
To re-cap, this is a policy that pays out a sum if the insured person is diagnosed with a defined critical illness. The range of illnesses is usually very wide-ranging particularly with newer plans with older policies having a more restricted range. Such insurance offers valuable protection against the on-set of serious ill health which could have devastating financial consequences and is especially important when considering household debts such as mortgages.
The claims history of Aviva, a leading critical illness provider, makes interesting and indeed very sobering reading. The following data relates to 2016 and only covers the one year:-
Number of claims paid: 4,268
Amount paid out: £311m
Average claim size: £72,871
% of claims paid: 92.3%.
The majority of claims, around 54% for men and 60% for women, were for people under age 50 with by far the most common reason for claiming being cancer which accounted for 63% of claims. Of claims made by men, 50% related to cancer. This rose to 74% for women, with breast cancer by far the largest cause.
Many critical illness plans also provide protection for the insured’s children and during 2016, Aviva paid out over £3.2m for customers whose children had been diagnosed with critical illness. A very sombre statistic.
If you have an older plan that you think might need reviewing or up-dating or haven’t in the past considered taking out critical illness insurance, please think again. Protecting your life and health is more important than your car or contents insurance so don’t ignore it.