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Summary
The result of progress in medical science on Critical Illness insurance. The payback afforded by reviewable insurances.

Premiums for Critical Illness Insurance are escalating due to the intensifying number of claims and apprehension about medical advances in the future future. Once diagnosed with a life threatening illness, CIC pays you a tax free payout, which will support you financially if you are unable to work, due to illness.

 2 major insurance companies will be elevating the cost of critical illness insurance soon. Legal and General’s payment will rise by 22 to 24 per cent and that of PPP by 23 per cent. These rises are insignificant in comparison with the 54 per cent imposed by BUPA and Friends Provident and the 61 per cent announced by Scottish Equitable and Norwich Union. LV are still deciding what rise they will enforce next month.

The insurance market is in turmoil as advances in medical science aid patients to survive illnesses, which would have been terminal only 8 years ago. The result of this massive change in medical insurance is that life insurance claims are decreasing whilst settlements on critical illness insurance policies have seen a sudden rise. Thus the cost of life cover is going down, while that of critical illness insurance is increasing rapidly.

In an effort to keep the price of premiums down, the Association of British Insurers has changed the circumstances under which cover is given for heart problems and prostrate cancer.

Many sufferers are now discovering that early detection of these conditions results in longer life expectancy. The illnesses under which Critical Insurance policies make a pay out are being redefined. This change will help to lower the number of claims and therefore decelerate the speed at which premiums are rising. (For instance), CIC will not pay out for skin cancer unless it is invasive)

Freddie Harrrison of broker’s Click Compare says that critical illness policies currently cover conditions, which are easier to detect and treat. Claims are consequently being paid out for non-life threatening illnesses, which is not the point of the insurance
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An appraisal of the terms of many policies is expected in the future. CIC for diabetes is being taken away by Standard Life, which leaves Norwich Union as the only insurance company that incorporates this condition.

 Reviewable life insurance quote are now being offered by an escalating number of insurance companies. conditions and pay outs covered by these insurances are reviewed every five years. A normal Critical Illness Cover is a guaranteed insurance, which keeps going for a set number of years. The payments remain the constant whilst the cover is in force, which is usually the term of their home owner loan. On the other hand this kind of cover is becoming more costly.

The Group Director of Friends Providents’s independent financial adviser division, Harrison Lloyd says that you have to pay for the assurance that a guaranteed insurance policy gives. He says that consumers are more likely to choose a renewable rather than a guaranteed insurance policy as the build up in costexpands. While Aviva raises it’s Critical Illness Insurance it is also introducing a reviewable policy therefore providing customer with a choice. Royal London has removed it’s guaranteed Critical Illness Insurance, whereas Scottish Widows is only offering reviewable cover.

It is understood that Legal and General’s reviewable price will be about 15 per cent lower than the guaranteed cover. If you already have a guaranteed Critical Illness Insurance it cannot be altered to add new definitions of illnesses.

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Henry Judd from LifeSearch thinks that although payments on reviewable insurance policies are possibly cheaper clients would soonerhave a guaranteed policy. He suggests that if you do not by now have cover it would be a shrewed decision to take it out soon,| prior to any more changes being announced.