Legal & General pays more critical illness cover claims

We’re pleased to announce that we paid £110 million in critical illness claims last year – this is almost 20% more than the £92 million that we paid in 2006 and 32% higher than 2005’s figure of £83 million. In total, we have paid over £500 million in claims since 1996.

We paid 88.2% of CIC claims in 2007 compared to 83.3% in 2006. This continuing positive trend is a testament to the work that we put in to reducing non-disclosure. In the past few months we have been at the forefront of the ABI changes to the way that all insurers view non-disclosure, with a view to paying out more claims as an industry.

Claims rejected for non-disclosure have fallen again this year (by 36%), to just 7.7%. The most common conditions we paid out on were cancer, terminal illness, heart attack, stroke and multiple sclerosis.

We also paid £179 million in life insurance claims last year, helping almost 4500 families when they need it most. The proportion of claims accepted was 96%.

In the past 12 months we have worked hard to pay more claims and have brought out new critical illness cover literature for advisers and customers to highlight the potential impact of non-disclosure. When we re-launched our critical illness cover in March 2007 we included three new illnesses, not previously covered, and also wider definitions for three other illnesses. We continue to invest in our claims management process, which ensures that fairness to the customer is paramount. Our claims assessors are highly skilled with a continual focus on quality and training.

In October last year, we were the first insurer to reduce the burden of ongoing duty of disclosure for our customers as experience showed that people may not have realised the need to disclose changes to their health right up until their policy start date. We feel that this is treating customers fairly and are still the only insurer to have introduced this benefit.

As we continue to look at ways to make life easier for you and your clients, we will be simplifying the underwriting process later this year for applications made via our OLP online system by issuing a confirmation schedule covering all the details disclosed during the underwriting process once an underwriting decision has been reached. This offers customers the opportunity to verify that the medical details disclosed on the application and during underwriting are correct and avoids the potential confusion caused by multiple documents covering slightly different medical details. We can confirm that a customer’s duty to disclose now ends once they have been accepted for cover and we receive the returned declaration. Please ensure that your clients are aware of the importance of signing and returning the confirmation schedule to ensure that we can waive their ongoing duty to disclose changes to their health.

A consistent and fair approach will be taken across all channels so customers with paper applications will also no longer need to disclose changes to their health once they have been accepted for cover.