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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The over fifties life insurance plans are selling like hot cakes.
They promise acceptance without medical questions and are regularly promoted by mature personalities like Jerry Hall and David Frost. Consumers who buy these plans may be paying a lot more in than their recipients will get out.
Guaranteeing a settlement on the insurance holders death, payments start from around eight pounds rising to around £60. Being sold to people between fifty and eighty the settlement is controlled by the payments paid, gender and age when the policy commences.

Significantly, no enquiries about their health are made.  Some insurance plans stop after a specific amount of time, but will still be valid until the policyholder dies. In other insurance schemes the premium is taken until the holder dies, on the other hand insurance holders can put more in than they get out depending upon when they die.

Referring to adverts for Axa Sun Life plan, Peter Chadborn of independent financial advisers Masons Financial Planning Ltd says ‘I can’t understand David Frostapproving this kind of product. He is a first-class act, but for this type of plan the same cannot be said.’

A director at Axa Sun Life plan, Joel Winters defends Havers’s role, saying he is only making consumers aware of the insurance plans existence , for which there is a terrific demand .He states, ‘The interest is their affordability because of their assured acceptance procedure and the low payments.’

Still, you could get an even better plan elsewhere buying regular policy on the same terms ‘People could get 3 or 4 times as much for their money from a normal life insurance cover, in return for replying to a few questions.’ Says George Meakins of Clarence financial services.

Not demanding any health questions forces more expensive fees as these plans interest customers with pre-existing illnesses who may pass away before the Insurance Company has covered its cost. Insurance companies also freeze any payouts for the first two or three years to  safeguard themselves. A refund of the premiums made is in general repaid if a policyholder departs this life of natural causes in this time.

The Manager of financial services at Marks and Spencer, Harrison Timms, admits that the price may be less for standard life cover but usually by the time you reach your 50’s, many have experienced some sort of medical condition, as a result this is why peopleprefer the over fifties policies. Insurance holders’paying in more than they ever get backis one area he doesn’t agree with. ‘When we put together our plan we decided to put a cap on the premiums,’ he says, meaning once the insurance policyholders have paid the amount insured their paymentscease.
Some over-fifties plans do sooner or later have cut off points, but lots of customers have paid over the oddsbefore they reach this point. Premiums normally cease at 90 with the LV plans and the post office running them for a set term.

The main reason people takeout these policies is to pay interment expenses. However, the ultimate settlement might not be enough money. A pre-payment policy could be a better selection with Old Mutual funeral care offering 3 packages priced between 2,548 pounds and 3,095 pounds. This type of plan can be paid for over three years.

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