Life Insurance -
Insurers improve life insurance claims - 02/05/2008
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Insurers have said they will be trying to improve the situation whereby claims are declined in cases involving critical illness.
The Association of British Insurers (ABI) said the industry would no longer refuse to pay out on claims if medical information had not been disclosed, unless the customer had deliberately withheld details.
The move comes after the industry was criticised last year by the Law Commission which said current rules imposed a heavy duty on people applying for insurance to volunteer information on anything that would influence an underwriter's decision. It said this may include information that people would have no idea was relevant.
To address some of the issues arising from claims being declined a number of initiatives have already been adopted. Making policy application forms easier to understand is hoped will make things clearer for consumers on the type of different conditions covered by policies.
These moves have already led to a fall in the number of claims on protection policies that are turned down.
The new guidance was drawn up in consultation with the Financial Ombudsman Service and insurance companies that are members of the ABI.
It comes into force with immediate effect for both new and existing policies, as well as for any claims that are currently being dealt with.
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