Consumers do not understand insurance

Mon, 04 Sep 2006

A new survey by the critical illness insurers Scottish Equitable Project has found that consumers have a worrying lack of understanding about the critical illness application process. The findings raise important questions about how far consumers understand the insurance application process.

The company surveyed 1,536 people, and found that 31.6 per cent were unaware that if they did not completely disclose their medical history then any claim they made could be turned down for non-disclosure of vital information.

The survey goes further, suggesting why people are under these illusions. Apparently, the vast majority of consumers believe that insurers will obtain their medical history from their GP before their Critical Illness Policy begins.

The head of underwriting at Scottish Equitable Project, Mr. Matt Rann, said: "It is these people who could find themselves in the devastating position of having a claim turned down because they had not completed the application form fully. All of this research points to a distinct lack of consumer understanding around Critical Illness and highlights a problem that can only be tackled through clear customer focused communication and education ."

Further to a Norwich Union call for full disclosure earlier this year, the need for disclosure in health insurance and life insurance has never been more evident.
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