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  • affects 1 in 4 women / 1 in 5 men before retirement
  • 94.1% of the critical illness claims are paid
  • protect yourself and your family if you get seriously ill
Why us?
  • get the cover that will pay when you need it
  • save up to 35%, cover from £5 a month
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Insurers: Aviva, Legal & General, Liverpool Victoria, Scottish Widows, Vitality, Zurich

Top 5 Reasons Why a Critical Illness Claim is Denied

One of the main reasons why people are wary of buying critical illness insurance (or any other long term protection insurance, for that matter) is the misconception that insurers will do everything to avoid paying out a claim. That can’t be any farther from the truth! Insurance companies do want to pay claims!

Over the years, the percentages of denied CI claims have dropped, mostly due to the efforts of The Association of British Insurers (ABI) in cooperation with the various insurance companies. The ABI has issued a Code of Practice that is aimed towards improving the clients’ understanding of exactly the kind of cover they get, as well as how some key elements of a CI claim (such as Total Permanent Disability and non-disclosure) are defined.

However, even with the improvements in how CI claims are treated, there are still some instances that a critical illness claim is denied. In 2011, the claims denial percentage for the different insurance companies are as follows:

According to statistics provided by The ABI for 2011, of the 15,060 CI claims received, 1653 (or 11%) of these claims are declined. The statistics covers CI claims, including Total and Permanent Disability claims.

Here are the top 5 reasons why a CI claim is denied:

1. Claiming for an uncovered condition.

There are some CI claimants who file a claim even when their medical condition is not covered by the policy. They may be thinking, “Well, it doesn’t hurt to try.” This may be brought about by a misunderstanding or lack of understanding about what the policy covers.

For instance, a client who files a CI claim due to the existence of a benign tumour will face a claims denial because this is not considered a critical illness and is more often than not excluded in the cover.

2. Claiming a covered condition that does not meet the definition of the critical illness.

A considerable portion of denials are for claims that do not meet the policy definition. They fall under these categories:

  • The critical illness is not severe enough.

    There are Persons insured who file a claim on the covered critical illness but the condition that they have is not severe enough to meet the policy definition of the covered critical illness. For instance, a client who filed a claim for deafness (which is covered in the policy) is denied his claim if he is deaf only in one ear. The ABI standard definition for deafness stipulates that for deafness to be payable, it should be permanent and irreversible loss of hearing in both ears.

  • The critical illness is due to an excluded cause.

    Some examples of common exclusions are: self-inflicted injuries, failure to meet reasonable doctor’s advice or critical illness that is due to drug or alcohol abuse. If the Person insured becomes critical ill is because he attempted suicide and drank a lot of sleeping pills and gets into a coma, the Insurance Company will deny the claim.

  • A short word on Total Permanent Disability.

    Definitions of TPD may vary from policy to policy. It will be helpful to check the definition used in your policy before filing a TPD claim against your critical illness policy. Usually, the Person insured is the one who chooses who his TPD cover is defined. TPD may be covered as:

    • “Own occupation”, where your condition prevents the Person insured from doing his own occupation;
    • Suited occupation”, where your condition prevents the Person insured to do a suited occupation based on his training and work experience;
    • “Any occupation”, where the disability prevents the Person insured from performing the essential duties of any job;
    • “Specified work tasks”, where the Person Insured (of a certain age, usually 60 or above) cannot perform three out of six work tasks or are unable to take care of yourself.

3. Failing to disclose relevant information at the time of the policy application.

Non-disclosure of important medical information may cause the Insurance Company to deny the claim. The critical illness policy is issued based on the information the proposed Person insured provided at the time of the application. Some medical information may cause the company to issue the claim but with higher premiums or deny the claim altogether.

However, what constitutes non-disclosure? This can range from the client innocently omitting some information, which the policy application did not expressly ask, to a deliberate omission in an effort to save on premiums. Recently, The ABI has narrowed down the definition of “non-disclosure” as information that the proposed Person Insured deliberately withheld from the insured. This means that any information was an innocent mistake, the claim is payable under the ABI Code of Practice.

4. Not having the necessary medical documents.

Insurance companies will process the claims mostly based on the documents provided, although they may also opt to have independent tests done or their appointed physician to look into the diagnosis of the critical illness. If the Person insured fails to provide these documents (i.e. he did not present his doctor’s report covering his diagnosis or the documents he presented are made by a doctor is not a consultant specialist, something that is required by some critical illness definitions), more often than not, his claim will be denied.

5. Filing a fraudulent claim.

The insurance company will carefully study the claim. Any findings of fraud will not only cause a denial of the claim but also a possible charge with regards to fraud.

You can actually lump the 5 reasons above to two major reasons:

  1. failure to meet the policy definitions and
  2. failure to disclose relevant information.

Below is a chart of these two reasons and the percentages they comprise for all denied claims for the different companies in 2011.

Ensuring the Success of Your CI Claim

Here are a few simple steps to help you make a successful claim on your Critical Illness policy:

  • Read your policy before you file a claim. This is to help you understand the kind of coverage you have.
  • Gather medical and other relevant evidence.
  • File a claim by filling out a claims form and providing the information requested by the insurance company.

To protect yourself and your family, save up to 35%, please fill the critical illness cover + life insurance form on the right now.


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