Friday January 11, 02:02 PM
Insurers to take new stance on claims
By Kate O'Raghallaigh
Insurance companies will pay out more claims for critical illness, income protection and life insurance where medical information has not been disclosed, the Association of British Insurers (ABI) announced this week.
Where relevant information
has not been provided beforehand, insurers will pay customers a fair sum, reflecting risk and premiums paid. If medical information is found to have been deliberately withheld, however, the claim will become invalid. In a small number of exceptional cases, premiums will be refunded if the insurer would not have taken on the policy if they had known the full facts. The changes are the result of new guidance for insurers drawn up by the Financial Ombudsman Service and ABI member companies.
The new commitment from insurance companies will hopefully lead to a reduction in the number of declined claims for protection policies. Stephen Haddrill, the ABIs Director General, said: Customers want to know that their insurance claim will always be assessed fairly and paid without fuss. The industry wants customers to be able to take out insurance with confidence. Today insurers have signed up to ensuring both of these happen. The number of protection claims that are turned down will fall.
Louise Cuming, head of protection at price comparison site Moneysupermarket (LSE: MONY.L - news) .com, said: The insurance industry’s announcement is most welcome.With consumer confidence as low as it is in the protection market, any move to improve this will be beneficial. Britain is an underinsured nation, so improving customer confidence and helping them understand policies is very important.
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