Press Release
Industry expert slams Which? critical illness report
The claim by consumer watchdog Which? that critical illness "is a luxury product" has been slammed by an industry expert who says that they are "sending out the wrong message" to consumers.
Speaking about the recently published report by Which? - which concluded that consumers may be better off ditching critical illness in favour of life insurance and income protection cover - David Thomson said that the report is "cynical and hypocritical".
Critical illness insurance pays out a tax-free lump sum in the event that the policyholder is diagnosed with a serious illness. What is covered varies from provider to provider, but it ranges from cancer to heart attacks to multiple sclerosis.
David, who is Chief Executive of specialist insurance website www.bestdealinsurance.co.uk is a staunch believer in critical illness insurance and says that the cover makes a huge difference to someone if they are unfortunately diagnosed with a critical illness. "If you are diagnosed with a serious illness, the last thing you are going to want round your neck is a mortgage" he says. "This product changes people's lives, giving them the resources and therefore the freedom to go and get the best medical treatment available or to free themselves from the financial worry of a mortgage."
The product launched around 20 years ago after extensive research showed that 90% of the people questioned would want a lump sum to either pay for private medical treatment or to clear their mortgage should they be diagnosed with a critical illness.
"Today, people still say the same thing" says David. "And the hundreds of testimonials we have from clients who have suffered from a critical illness prove that being having no financial worry does help lessen the load at such a crucial time.
"With the NHS under strain, many clients choose to use the money to pay for the best medical treatment available. Others prefer to pay off their mortgage".
He cites as an example a client who was diagnosed with cancer: "The critical illness policy enabled our client to clear his mortgage as well as go out and buy himself a new truck to cheer himself up" says David, adding: "He told me that having no financial worries for his family's future as well as being able to treat himself when he felt really down helped get him through the treatment and allowed him to concentrate on getting better.
"If our client had just life insurance and income protection as the Which? report suggests that consumers do, then there would be no lump sum payment and no money available for medical treatment.
"Income protection for someone with a critical illness is a like giving them a slow death sentence. It is a temporary measure and leaves the policyholder no choices. The bare necessities are covered, but there is not enough to pay for private treatment or for them to be completely financially worry-free. And income protection will pay just half your monthly income. This won't allow you to pay off mortgage or live the life you want to live, especially with you having more time on your hands. And you are still left with financial worries.
"Critical illness insurance is a policy designed for you. It gives you choices rather than life insurance which is designed to look after someone who is left behind after you are gone. Critical illness cover ensures that you don't get left behind."
David also says that the while the report makes the valid point that around 20% of critical illness claims are refused due to non-disclosure of previous or existing medical conditions, as long as consumers are totally honest when applying for cover, there shouldn't be a problem.
He also recommends that consumers looking to purchase critical illness cover ensure that they fully read and understand any exclusions within the policy so that they get the protection needed. "The good news" he says "is that the ABI has recently announced that policy wordings have to be clearer, too, which will be significantly beneficial to people looking to buy cover.
"In fact, the critical illness policies available now are better than they have ever been and usurp the alternatives. The people who are suffering with 'problem' critical illness cover now are those people who have the older policies."
David advises that consumers should always seek financial advice from a specialist broker when considering critical illness insurance as some policies offer significantly better benefits than others, and a good broker will know where to place your business.
David summaries "No other policy does what critical illness does. There is no way that critical illness is a luxury and it worries me that comments from such a trusted organisation as Which? could turn people off from buying it, leaving them financially vulnerable at a time when they need it most.
"You wonder if the journalist who wrote this report actually has critical illness cover or not and what would happen if they were diagnosed with a serious illness."
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