The critical illness policies firstly launched in the UK was simple compared to those we can find today. During the year 1990 the core set of illnesses had already been defined as cancer, heart attack, stroke, CABG, major organ transplant and kidney failure. Total and Permanent Disability was also included to catch a range of severe illnesses which could change the lifestyle of someone.
Moreover, the number of critical illness covered broadened rapidly. This was due to many other insurance companies stepping in the insurance market hence elevating competition. Therefore, as each company marketed its critical illness policy, it has to make sure that the critical illness policy contained something unique. This uniqueness could have then helped to attract potential customers seeking for critical illness insurance. It was said that the long list of critical illness conditions covered, sometimes 30 or more may no longer be important. With 30 critical illness issues, one could expect loads of conditions to be read. These could have been most of the time poorly understood by the policyholder as confusion may have aroused resulting in loss of benefits.
Critical illness policies exist in two different forms. People could select a basic policy which covered from 6 to 10 critical illness conditions. Meanwhile other customers could choose the comprehensive policy which covered up to 30 illnesses. Additionally, some critical illness insurers had also designed a budget stand alone critical illness policy. This policy covered a few major and some common illnesses such as cancer, heart attack and stroke. Unfortunately this type of critical illness policy never made an impact over the insurance market.
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Furthermore, as time passed new critical illnesses were discovered. This then aroused several questions on the severity of each critical illness. People preferred the simplicity of a policy and the way they would benefit from the payout, hassle free. At that point an argument could affirm that less benefits be paid according to a less severe critical illness. This is in fact not just an affirmation. This process is used in the South Africa and has not yet been adopted in the UK.
The variation of critical illness cover in the insurance market among companies did not make it favourable in the IFA market. This pushed IFA towards finding a solution. IFA worked hard until the fruit finally yielded. In 1994, IFA attained standardised definitions for critical illness cover which comprised of the six core critical illness classifications.
Nowadays, many critical illness insurance companies consider seven major diseases in their policy statements. The fine print of the policy may have surely something to reveal. Reading the critical illness policy attentively can be a wise thing to do. Sometimes policies define what they cover and they will not. If you are not sure to understand everything when buying a critical illness cover, you could request the help of a specialised person. With enough education over the subject you could then choose a critical illness cover that may suit you best.
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When critical illness cover first appeared, only six illnesses were covered. These were cancer, stroke, heart attack, kidney failure, major organ transplant and coronary artery bypass. Nowadays, the number of critical illnesses covered, have increased in the UK. Some companies might provide you with policies covering up to 30 different critical illness conditions. It should be pointed out that this trend may nearly be coming to an end.
There exist two critical illness cover schemes: The basic critical illness policy which covers 6 to 10 illnesses and the comprehensive or extended policy which covers up to 30 illnesses. Also, most critical illness policies cover total or permanent disability.
According to Healthcare Study Group 2000, ?A critical review?, about 7,000 claims were admitted during the year 1991-1998 taking into consideration the UK market globally. As per Spry A, 2000, cancer, heart attack and stroke made up about 80 percent of critical illness claims accepted. The ABI's seven core conditions along with Total Permanent Disability accounted for around 97 percent of claims which may have been admitted till date. Moreover, rejection of claims was and still is a very common issue. About 70 percent of claims may have been declined as policy definitions may not have been met. The fact remains that much awareness about the policy, here critical illness, needs to be given to clients. By doing this, clients already know what to expect from their critical illness insurers regarding their policies.
Furthermore, a further 22 percent of claims turned down may be due non disclosure. That's why people must be educated over the subject prior to making an agreement upon a critical illness cover. However, the level of claims may vary between men and women and also depending on their ages. The surveys indicate a 65:35 ratio about making a critical illness claim in the UK. Therefore, according to Munich Re 2001, cancer may be the largest cause of critical illness claims for men with about 42 percent followed by heart attack at 30 percent. Also, other claims may have also appeared with 8 percent stroke, coronary artery bypass about 7 percent and TPD about 6 percent. As for women, cancer may be the most dominant form of critical illness with around 74 percent of total claims. Other claims resulted with 8 percent multiple sclerosis, TPD 8 percent and stroke 5 percent. The most common form of cancer among women may be the breast cancer.
Based upon Munich Re 2001, for both men and women there may be no remarkable difference in the cause of claims among smokers and non smokers. The ratio of smokers to non smokers among men and women is more likely described as follows: around 150 percent for men and 137 percent for women. As mentioned before, this ratio depends on the age. Therefore the risk of contracting a critical illness at the age of 30 can be 25 percent higher. For people at the age of 60 the risk of suffering from a critical illness and hence making a claim can be 70 percent higher. Additionally, among men, the highest rates of critical illness claims may be due to heart attack and coronary artery surgery. Meanwhile a reduction in the proportion of cancer claims was more likely to be found while critical illness claims for stroke may have kept a constant rate. On the other hand critical illness claims among women of all ages may have been mostly cancer. However, at younger ages, multiple sclerosis may dominate.
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