Insurers scrap dual-cancer cover plan
Wednesday, 08 February 2006 12:00
Proposals to introduce two levels of cancer cover have been scrapped, the insurance trade body has announced.
Plans brought forward by the Association of British Insurers (ABI) last year would have created two types of cancer cover; one that paid out on a wide range of cancers upon diagnosis, and another cheaper policy that would only pay out when the cancer was more advanced.
But the ABI today said that insurers would have to provide the higher level of cover.
The announcement is accompanied by new guidelines to make buying critical illness, income protection and private medical insurance policies less daunting.
Memory test questions like "Have you been to a doctor in the last five years?", will be banished from application forms under the drive to improve clarity on health and protection insurance.
Private medical insurance information leaflets should also be improved to better explain what treatment will be covered for different illnesses including cancer.
And guidance on application forms will also ensure clear warnings are provided about the likely consequences of failing to disclose pre-existing medical conditions.
"Today's announcements will help customers better understand health and protection insurance, and ensure that in the future there are fewer declined claims," said Richard Walsh, the ABI's head of health insurance.
"The response to our consultation on critical illness insurance showed great support for our proposals to improve clarity. We have listened to concerns from cancer charities and others, and we will not now be introducing two levels of cover for cancer - insurers will have to provide the higher level of cover."
The ABI's plans to introduce two levels of cancer cover drew criticism from both cancer charities and industry representatives.
The Association of Independent Financial Advisers said in its response to the consultation: "A two-tier cancer definition presents significant risks in both consumer understanding and practical terms.
"Psychologically, there is no stage where cancer is diagnosed and would not be considered by the sufferer to be a critical illness."
Macmillan Cancer Relief had described the plan as a "backward step".
Spokesperson Ayesha Owusu-Barnaby said: "If you've just been diagnosed with cancer, probably the last thing you want to do is have to prove to your insurance company how ill you are, particularly as the nature of the disease and its treatment can mean you may feel well one day and too ill to work the next."
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