IFAs: Advisers have insisted that positive changes to CI policies be applied to all clients
By Lucy Quinton
IFAs have urged insurers to apply any positive changes to critical illness (CI) insurance retrospectively.
Kevin Carr, head of protection strategy at LifeSearch, has called for providers to implement the positive changes on all CI contracts, instead of just new policies. He also argued that, if an insurer had previously declined a claim on something that was not covered and then became covered for that under the current Statement of Best Practice, then, providing that a policyholder is still paying the premium, the insurer should really pay the claim once they resubmit it.
Richard Verdin, sales and marketing director at Direct Life & Pension Services, added that he too was in favour of such a proposition, but said he understood the financial implication on providers of bringing such things to market.
However, providers were not keen on the idea.
Andrew Cook, marketing manager at Standard Life, said he was not convinced it would work. He said: "We've struck an agreement in a contract with them already. To then go back to them and say we are making certain changes in certain places is not practical and generates more confusion among policyholders who may already be confused about what they've got."
Even if the policyholder had submitted a claim that had previously not been covered, Cook said it was impractical to then have the consumer resubmit a claim for the illness in the hope it would be paid. He added there was effectively a contract between the provider and the policyholder and to say, in theory, they were going to be made a special offer "was not feasible".
Agreeing with Cook, Joe Wiggins, PR manager, protection and housing at Legal & General, said CI cover was "regularly updated and improved according to market conditions".
He added: "We need to make sure that people know where they stand, and making retrospective changes would be confusing and impractical. It's simply not true that all customers moving to a new policy would be better off".
Teresa Fritz, principal researcher at Which?, said providers always have a contract with a consumer that incorporates terms and conditions, but they always find a way through a clause to implement retrospective changes when they want to. She added: "We would be disappointed if providers did not extend this to existing policies. Not only do you have to be fair to new customers but you also have to treat existing customers fairly too. "
Carr added that there was no reason why providers should not add the positive changes to the policies and said that it would not even be the first time that such a change had occurred as Swiss Life had previously done so in the past.
