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Tell The Truth With Life And Critical Illness Insurance
nsurers treat the
non-disclosure of June 2001 - Ms W went to see her
information on an doctor about an area of flaky
application form very seriously skin on her back, she assumed it
indeed, and it is the most common was something like eczema. Her GP
cause for the rejection of a life wanted a specialist to have a
or critical illness insurance look, and made a referral to a
claim. This true story explains dermatologist. Before the
that the situation isn't always appointment arrived, the patch of
black and white, and demonstrates flaky skin cleared up, so Ms W
the severity of the penalty. We cancelled the appointment,
have changed some details to thinking no more about it. She
protect the anonymity of the did not imagine that it was
policyholder. anything serious, and the GP had
not given her the impression that
Ms W had to have an operation to there was anything to worry
eradicate cancerous lymph nodes about.
from her groin, and immediately
fell ill after surgery with an August 2001 - a sales
infection she picked up in representative from Ms W's life
hospital. Critically ill, she had insurer, Standard Life, called
already made a claim on her for a routine sales visit. Ms W's
critical illness insurance, circumstances had changed and she
however she received some now had a young family depending
unexpected bad news. Her claim on her. The sales rep suggested
was rejected and she was not taking out a critical illness
going to receive the "£200,000 insurance policy, and she readily
she was insured for. How did this agreed. Ms W took out "£200,000
happen? Read on so we can worth of critical illness
explain. insurance.
Two years later - Ms W learnt
The sales representative talked that she had skin cancer, and
Ms W through the application major surgery quickly followed to
form, filling in the answers on try and remove the cancer. Ms W
her behalf. When they came to the naturally made a claim on her
section about any incidences of critical illness policy, for
referral from a GP, Ms W was which she fully expected to
unsure what the question meant, receive a "£200,000 payout.
and asked the sales
representative for clarification. Soon after, Ms W received the
According to Ms W, the sales rep rejection letter from Standard
told her that she only needed to Life - the claim was rejected on
mention a referral if it related the grounds of "reckless
to a serious matter. Ms W didn't non-disclosure". As far as the
think it was worth mentioning the insurer was concerned, Ms W had
GP referral for the flaky skin, withheld information on the
since she thought it was probably application form, and this had
just eczema. She didn't mention invalidated her claim.
it so it didn't go on the form.
Ms W signed the form after As you no doubt have realised, Ms
completion and she applied for W should have mentioned the GP
the Standard Life policy referral to a dermatologist - and
believing that she had provided her failure to mention it
all the required information. resulted in a severe penalty. How
could she have made such a
Ms W soon received notification mistake?
that she was insured for
"£200,000 in case she developed a Two major errors were made:
critical illness.
1. When Ms W was asked to give
details of any referrals she referral was not worth putting on
asked the sales rep what kind of the form. She made this decision
referrals they meant. She was based on advice given by the
advised that she only needed to sales rep, and it was a genuine
mention referrals relating to mistake on her part.
serious conditions. This advice
was incorrect. The question asked Taking the above story into
for details of "all occasions her account, we think that Standard
GP had referred her for tests or Life should realise that Ms W
treatments". ALL OCCASIONS means made an honest mistake, and did
ALL - whether they were thought not deliberately withhold any
to be serious or not. The information. The sales rep did
insurance company needs to know not give the right advice, and Ms
absolutely everything they ask W followed that bad advice in
for on the application form, and good faith. It wasn't her fault,
Ms W unfortunately did not and Standard Life should relax
provide that, thanks to the sales the penalty in this particular
rep's advice. case.
2. The GP did not give Ms W any Make sure it doesn't happen to
indication that the flaky skin you
could be something serious, a
fact that the GP stood by later. Filling out a life or critical
Ms W did not realise that the illness insurance application
skin condition could be anything form has to be taken very
other than eczema, and so when seriously indeed. You must read
told that she only needed to give every single question and answer
details of referrals relating to each one providing all the
serious conditions, she truly necessary information and detail.
believed that her dermatologist Withholding information is not an
option, don't be tempted by the NB: Standard Life rejects 5%,
thought of cheaper premiums Friends Provident rejects 15% and
because on making a claim, you Legal & General rejects 16% of
will be found out and the claim all critical illness claims
will be invalid. Don't take that because of policyholders
risk! withholding information (whether
deliberately or not). The
Hopefully, Standard Life will see insurance industry realise that
that Ms W did not deliberately they need to do something to
mislead them, and they will give address the situation, and are
her the payout she deserves. currently developing new ways to
get information from applicants,
People that do deliberately and to publicise the severe
mislead the insurers do deserve penalties for not providing full
what they will eventually get - and accurate information.
nothing.
About the Author:
Michael writes financial articles for Life Insurance Quotes Online who offer life insurance and Mortgages
Source: www.isnare.com
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