ABI reinforces disclosure importance; dispells 'act of God' myth

The ABI is highlighting the need for clients to fully disclose their medical history when taking out protection and health insurance.

It is also reiterating the importance of complete disclosure by reassuring consumers that life insurance is based on their health when the policy is taken out, not any subsequent changes.

The protection market has sought to improve medical disclosure for several years, particularly regarding critical illness (CI) cover and, according to ABI statistics, is making headway.

Non disclosure now accounts for approximately 2% of CI claims declined, a sharp fall from the high of near 20%.

The comments come as part of an ABI bid to build consumer confidence in the industry, for which the body is unveiling its top insurance tips and myths.

Under a ‘disclosure is key' heading, it says: "Whether it is previous medical problems or a recent speeding fine, full and early disclosure avoids any possible problems later.

"Holding back something that is relevant will be a false economy if it means your claim is later turned down. If in doubt, always tell your insurer," it adds.

It later expands on the subject when explaining ‘life insurance is based on your health when you take out the policy, not on any subsequent changes.'

"Unlike annual insurance policies, such as motor and household, life insurance is a long term contract," it says.

"So as long as you answer all questions honestly and provide full and correct information at the start, your premiums and your cover should stay the same as you get older, even if you fall ill."

It has also sought to eradicate the myth that policies contain an ‘act of god' exclusion clause.

"Insurance policies do not contain such an exclusion," it says.

"The policy will set out what is insured and what the main exclusions are. If loss occurs from an event covered, then the insurer will pay out, in accordance with the policy terms and conditions."