CI: Which? report met with backlash from industry experts
The industry has been quick to slam the recent report made by Which?, which argued that critical illness (CI) is "a luxury product".
The report stated that consumers would be better off ditching CI in favour of life insurance and income protection (IP).
One critic who disputed the claim made by the consumer watchdog was David Thomson, chief executive of bestdealinsurance.co.uk, who called the report's findings "cynical" and "hypocritical".
He added: "This product changes people's lives, giving them the resources and the freedom to go and get the best medical treatment available or to free themselves from the financial worry of a mortgage." Thomson explained that giving IP to a person with a critical illness was the equivalent of giving them a "slow death sentence".
Kevin Carr, head of protection strategy at LifeSearch said, however, that, to a certain extent, he agreed with the Which? report because, "while CI has paid out around £2bn over the last five years, it shouldn't be the first priority, which should be IP. In the absence of IP, it is fair to say products such as CI and private medical insurance are luxuries."
Consumers cannot always afford both CI and IP, which means a choice between the two has to be made. In those circumstances, Carr said that IP must be a priority.
In addition, Thomson said the report also pointed out that around 20% of CI claims are refused due to non-disclosure of previous or existing medical conditions, but, as long as consumers are totally honest when applying for cover, there should not be a problem. Carr highlighted that 10% of CI claims were, in fact, due to non-disclosure, while the other 10% were for definition not met.
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