Life and Critical Illness Insurance. Fully disclose your medical history when you apply. You have been warned!
To help underline some issues, we want to tell you a true story - but weve hidden the policyholders name to preserve anonymity.
Mr P was fighting a secondary infection following surgery to remove cancerous lymph nodes when he received further bad news. The insurer for his critical insurance policy, which he took out two years earlier, was refusing to pay out the £180,000 he was expecting. To understand why and the issues involved you need to understand how events unfolded.
• In July 2001, Mr P visited his Doctor after discovering a patch of flaky skin on his back. Mr P thought it was eczema. During a brief consultation, his Doctor thought that it should be looked at by a dermatologist and recommended a referral. But soon afterwards the flaky skin healed and Mr P cancelled the appointment. Apparently the Doctor did not express any major concern and some years later admitted that Mr P was probably unaware of the urgency of the referral. (health insurance)
• Eight weeks later a representative from Standard Life made a routine visit to ( mortgage quotes ) Mr P at his home. As Mr P had a young family, the representative reviewed Mr Ps insurance cover and suggested that he should also have £180,000 of Critical Illness Insurance. Mr P thought it sounded a good idea and agreed. So, he agreed to make an application there and then.
The representative brought out the form and went through it, writing down Mr Ps answers for him. When it came to the question asking Mr P to divulge all occasions his Doctor had recommended referrals for tests or treatments, Mr P asked the representative what Standard was looking for. Mr P alleges that the representative replied that Standard wanted appointments that related to serious conditions. Mr P did not believe that his referral for what he thought at the time was eczema, fell into that category - so he did not mention it. He then signed the form genuinely believing that he had done what Standard Life required.
Standard subsequently accepted his application and issued a Critical Illness Insurance policy.
• Two years later Mr P was diagnosed with skin cancer. Major surgery quickly followed to remove cancer from his groin. As his policy covered cancerous lymph nodes, Mr P then made what he thought was a valid claim.
• Standard subsequently rejected his claim on the basis of "reckless non-disclosure" - the insurers jargon for Mr Ps failure to disclose his referral to the dermatologist.
The Issues (life insurance)
It is quite clear that Mr Ps application should have included his referral to the dermatologist. So why didnt he provide the information?
It seems that two aspects combined to create a situation: Standard Lifes representative interpreted the question on the application form to divulge "all occasions his Doctor had recommended referrals for tests or treatments" as only relating to serious conditions. That interpretation was wrong. The question asked for ALL OCCASIONS. ALL means ALL and is not asking the applicant make a judgement as to what is serious and what is not. The Representative was wrong.
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Todays Tip
Dont buy direct from a Life Insurance Company or even your bank, until you have received at least two quotes from specialist life insurance brokers. That way youre bound to get a great deal for your life insurance policies . (cheap car insurance)
Did you Know?
Personal secured loans are widely advertised on the Internet but research has found that of those applicants who are accepted, 43% are offered a rate that is higher than the advertised rate (source: Experian, the UKs largest credit reference agency). Therefore, if youre looking for a cheap secured loan, its probably best to apply through a loan Broker. The Broker will know exactly which lenders will accept your credit history and find you the cheapest possible loan.
Did you Know?
According to Land Registry figures, there has been a huge increase in the number homes sold for £1m plus. Despite what youd expect, this hasnt caused the scramble for business youd expect from lenders. Many of them are exercising caution when it comes to the well-heeled mortgage seeker. Surprisingly, the best deals go to the smaller borrower. It seem as if lenders would prefer to lend 10 borrowers £150,000 each rather than one loan of £1.5m, in order to spread the risk.
It is, however, beginning to get easier to get mortgage quotes for high value homes. Recent figures from the Land Registry show a massive increase in the sales of million pound plus properties.
Did you Know?
According to the Council of Mortgage Lenders, last year over 200,000 homes in the London area were financed by an interest only mortgage without a repayment vehicle being in place. Of these, 60,900 buyers were first-timers. (cheap car insurance)
We cannot find national figures for the total number of homebuyers with interest only mortgages. However, the market share for interest-only mortgages has been running between 10 and 20% over the past 10 years.
Now it looks as if mortgage brokers have been arranging more than half of these interest only mortgages. So when these mortgages reach maturity, if the mortgage holder hasnt enough cash to repay the mortgage debt, many of these brokers could be up with a claim for miss-selling.
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