Recent stories in the press have again lambasted the insurers over critical illness insurance. The core problem is that a critical illness claim is not as straightforward as, for example, a claim under life insurance.
With life insurance, it's going to be hard for the insurance company to argue that you're not dead! By their very nature, critical illness insurance claims are much more complicated.
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The insurer will need to satisfy itself that the claim is validated in three key areas before it meets the claim: –
Has the illness been correctly diagnosed?
Is the confirmed illness included in the schedule of insured critical illnesses covered by the policy?
Did the policyholder fully disclose their medical history and current state of health on their original application form?
On the first point, it's obviously in the policyholder's interest to verify the medical diagnosis – so there's rarely ever any conflict between the insurance company and the policyholder on that issue. It's the next two areas that the insurer needs to validate, where conflicts seem to arise.
With constant development in medical knowledge, from time to time there can be some situations where validation falls into a grey area – a policyholder will argue that their specific illness is insured whereas the insurer will argue that it isn't.
Insurance companies are aware of this problem and they often change the wording in their policies in an attempt to clarify the scope of the cover and eliminate areas for dispute.
Nevertheless, disputes do happen all too frequently and sparks fly when a policyholder thinks his illness is covered but the insurer disagrees.