In recent years sales of critical illness insurance have flagged. The primary cause is the huge 70% increase in
premiums experienced during recent years. For many, critical illness insurance has simply priced itself out of the
market.
It's not that critical illness insurance is a bad idea. After all it pays out a lump sum if the policyholder is diagnosed with
one of the many critical illnesses listed on the policy and the policyholder survives at least 28 days from diagnosis.
(Note: some policies have a 14 day survival period.) Most policies have a huge list of insured illnesses although about
60% of claims are for cancer – not surprising, as 1 in every 3 people will develop cancer sometime in their lifetime. In
fact when you look at the concept of Critical illness insurance you can easily make a case that everyone living on
earned income should have a policy. It's designed to give you a pot of capital to live on if serious illness prevents you
from working normally.
Premiums have increased dramatically because medical advances have meant that many illnesses that proved fatal in
the past are becoming quicker to detect and easier to treat. Hence insurance companies have found themselves paying
out earlier on claims and on illnesses which are not necessarily debilitating - which was the original purpose of critical
illness insurance.
To give you a better idea of the sort of illnesses we're talking about, here's a typical list:
Alzheimer's Disease
Aorta Graft surgery
Bacterial Meningitis
Blindness
Brain Tumour
Cancer
CJD
Coma
Coronary Artery by-pass surgery
Coronary Artery Angioplasty
Deafness
Heart attack
Heart Valve replacement/repair
HIV/AIDS resulting from blood transfusion
Inability to perform your duties of occupation
Kidney failure
Leukaemia
Loss of limbs
Loss of speech
Major organ transplant
Motor Neuron diseases
Multiple Sclerosis
Occupational HIV/AIDS
Paralysis
Paraplegia
Parkinson's disease
Stroke
Third Degree burns
Any illness that results in Total and Permanent disability
Insurance companies have at last realised that they're not going to get anywhere marketing policies that people can't
or won't afford, and where the companies can't afford to lower prices. So it now looks as if insurers such as Scottish
Widows are considering a break through – splitting the cover so that the prospective policyholder can specify which
illnesses he or she wants to insure against. It's a form of “menu pricing” – cover for each illness would have a price
and you simply select which illnesses you want to insure against.
Whether such insurance proves popular will very much depend on the cost. For example, if cancer accounts for around
60% of current claims, you'd expect the premium for covering cancer alone to be about 40% cheaper than a full
strength critical illness policy. We'll have to wait and see.
If you're interested to find out how much a standard critical illness policy would cost you, you'll find it cheapest on the
Internet. The best sites to look out for are the independent discounting brokers who deal with all the big insurance
providers. These brokers can search the whole market for you, come up with the cheapest insurer, and discount their
price. Try to use a broker who'll also give you personal advice on the phone as some policies do vary in the scope of
their cover.
Article Source: http://www.Free-Articles-Zone.com-By Michael Challiner
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