SUMMARY: A recent review of Critical Illness Cover (CIC) by the FSA unearths some growing fears from consumers.
Critical Illness Cover to evolve after review
By Melinda Varley
CIC usually pays out a lump sum if a person is diagnosed
- Memo to myself. Get Keyman Insurance
- Have you ever thought youd forgotton to take care of something REALLY important ? The Author remembers keyman insurance
- Sisters Are Insuring Themselves Finance is the New Feminism
- On average, women live 7 years longer than men but pay upto 35% less for their life insurance. This article explains why.
- A few pointers to reduce the cost of your life insurance.
- Getting Cheap Term Life Insurance
- Life Insurers use the Body Mass Index to tighten the belt on fat people
- If youre fat the life insurance companies will load your premium by up to 400%. But how do they decide who is overweight? This article explains.
- Life Insurance. How the new regulations affect policies written in trust.
- The 2006 Spring Budget changed the treatment of some life policies written in trust. This article explains the tax position unveiled by the Finance Bill.
- Life Insurance – Outweighing The Benefits?
- Insurance companies need to know if you're overweight. Here's a question you can't avoid!
Many sales are made on an advised basis following a full assessment of the individual customer's financial needs. Overall, CIC sales have been in decline - falling by around 30% between 2002 and 2004.
Firms selling critical illness cover (CIC) are making efforts to meet required standards but a new survey reveals they need to do more to show they're treating customers fairly and helping them to have a better understanding of the product.
Visits to firms and mystery shopping exercises by the Financial Services Authority (FSA), have specifically looked at how compliant firms' sales processes work when selling CIC.
However, FSA Director of Retail Firms Sarah Wilson, said the survey had many ( home insurance quotes ) positive findings but also recognised some problems.
"CIC [as a product] has launched initiatives to deal with them and to assist in the fair treatment of customers, especially to make policy documents and applications forms clearer. It is ( life insurance quotations ) early days but these seem to be having a positive effect.
"However, our work confirmed some of the compliance concerns we already identified last year in the context of work on the financial promotion of CIC and on general ( secured loans ) insurance documentation. As CIC can be complex, firms sometimes have trouble getting customers to understand what they are buying."
This lack of understanding makes it difficult for customers to make a ( medical insurance ) judgement about whether CIC the right product to meet their protection needs as oppossed to a payment or income protection policy.