The Association of British Insurers (ABI) has issued a new statement regarding best practice for providers of critical illness insurance, which will have to be implemented by the end of next year at the latest.
The move by the industry body should mean greater clarity for people taking out critical illness cover, as it introduces changes that take into account previous issues regarding the insurance type, especially in terms of total permanent disability cover in critical illness policies .
Although total permanent disability cover is only involved in 3 per cent of all claims under critical illness, according to the ABI, it does present a much higher proportion of claims that have not been accepted in the past.
The statement therefore brings in a new set of standard definitions for total permanent disability cover, as well as replacing the old wording of the terminal illness definition, including changes to definitions for cancer and Parkinsons disease . In addition, the pre-existing conditions exclusion for policies involving children’s critical illness has been standardised.
Nick Kirwan, assistant director of health and protection at the ABI, said "The work on developing standard definitions for TPD and children’s cover will help ensure that critical illness policies are clear and pay out in line with customer expectations."
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