Nothing is more distressing in life than to be diagnosed with a serious or severe condition. Matters are made much worse when your insurance company tells you that they will not pay out on your critical illness insurance or private health policy for the Cancer or HIV you are suffering from.

You are told to read sub-clause six of paragraph 326 of the small print, which tells you that you have been diagnosed with the  wrong type of cancer. Only the first five days of your treatment will be paid for and only tumours below the knee are covered, then it’s down to you to find the finance.

This scenario may sound ridiculous, but in spite of brokers and insurers being regulated, this type of procedure continues to take place. It has been a slow process to clean up the industry and to make certain that consumers get a fair deal.

A little while ago Cancer Backup, a registered charity, highlighted this predicament by organising a large assortment of  shopping surveys, which exposed some alarming facts about the private medical insurance companies. It found that of nearly all the leading insurers only HAS provided life cover for cancer patients right through the length of their illness. Only  the initial treatment is covered by the majority of health insurance companies. Treatment or care over a longperiod, such as hormone replacement or chemotherapy is not normally included.

While insurers and brokers want to finance long term cover for insurance holders with severe illnesses, they won’t always make it clear to would be customers, at the time of taking out the policy what they are covered for.

Although both  Cancer Backup and Macmillan Cancer support have been in talks with similarestablishments within the market to raise the standard of sales practices and make the wording of insurance documents much clearer, progress has been slow since the report was published two years ago.

Private medical insurance and critical illness cover  is usually taken out by clients who are relatively hale and hearty. Getting cancer is the last thing to cross their mind. That is why it is imperative to specify a policy’s exclusions before they sign.

A statement of best practice for insurance companies writing and selling medical policies has been revised recently by the Association of British Insurers, which is a welcome step in the proper direction.

The market body has now proposed that life insurance companies and providers selling these forms of insurance should set up similar case studies, which explain the circumstances when an insurance policy will or will not be paid. Regrettably insurance providers are not obliged to adhere to this code, which is optional.

While the ABI’s initiative is to be embraced, the best way of explaining an insurance policy is by asking the salesman to explicate the small print.

Furthermore, industry jargon is in spite of everything even now being used by insurers to baffle the customer. For example it is not right to categorize cancer as an acute or chronic illness, argues Cancer Backup. On the other hand insurers are resolute that it should go in the acute group. customers are only told about this when they make a claim.

Even though the  Association of British Insurers have got their responsibilities right, the life insurance companies can only be forced to better their principles by the regulator. Improved training of call centre staff, who sell the bulk of the policies, is also long overdue.

More rigorous marketing procedures are required with jargon being eliminated. At the end of the day it it is the job of  the insurersinsurance companies to make sure that their clients fully comprehend the small print of their policies before they sign the document.

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