The Association of British Insurers is this week to present latest proposals to clear up consumer misunderstanding of key terms and conditions of health and critical illness insurance policies.
The list of concerns the ABI has raised serves to highlight for consumers the pitfalls in the small print of health cover.
The primary concern for the ABI is to work towards an industry-wide consensus on the definition of Total and Permanent Disability (TPD).
It is also important for consumers to understand that TPD is often treated as an add-on part of a health insurance policy, and that those policies that do include it in their cover can contain exclusions that apply solely to the TPD element.
In the case of certain Legal & General health policies, for example, one definition of TPD is a situation where the assured ‘is totally unable to follow his/her own occupation and in the opinion of Legal & General’s Chief Medical Officer is likely to remain so permanently.
Another definition of TPD used for other L&G policies is that the assured be unable to perform at least three of the following activities: walking 200m unaided; getting into or out of a car or bending to pick up an object from the floor; communicating by answering a phone and take a message; reading a daily newspaper with glasses if needed; writing legibly without aid; and climbing a flight of stairs without stopping or suffering severe discomfort.
Some of the specific terms to be addressed include the following, in relation to health and critical illness insurance:
Cardiomyopathy: this technical medical term must be explained to consumers as inflammation of the heart muscle, and the symptoms of breathlessness and chest pain should be mentioned.
Rheumatoid arthritis: it should be made clear that rheumatoid is a specific type, as there are various other types of the disease which may not be covered.
Severe inflammatory bowel disease: consumers must not be allowed to confuse this with the less serious condition of irritable bowel syndrome.
Severe specified mental conditions: it must be clear to consumers that policies can require a stay of at least 8 days in an NHS mental hospital, in order to qualify for cover.
