Cracking the critical code

By HELEN MONKS
Updated: 19:00 EST, 19 May 2002

SMALL print is to prove less of an obstacle to critical illness buyers with the launch of a new best practice code. The Association of British Insurers hopes its initiative will boost confidence in exactly what conditions will trigger a payout, and make it easier to compare products.

Commonly used terms, such as assessment period - the time taken to assess whether you will get a payout - and core conditions - covered by every critical illness policy - are to be standardised to curtail confusion and allow easier comparisons.

The code will also seek to reflect advances in medicine. Insurers claim that if definitions of curable serious diseases, such as prostate cancer, were left unchanged, payouts would rise, leading to higher premiums across the board.

'The changes will benefit consumers by ensuring policies are up to date and cover remains affordable,' says Nick Kirwan, head of ABI's critical illness working party. The code is effective from next May.

Advances in screening and treatment now mean that those diagnosed in the early stages of prostate cancer can often be cured. Under many critical illness contracts, these patients would have still been entitled to a payout, even though their condition is not life-threatening.

The ABI's best practice statement will say prostate cancers policyholders can only claim on advanced or aggressive forms of the disease. Customers will also see a tighter definition of heart attacks, reflecting new tests used in diagnosis and treatment.

The ABI has also updated its consumer guide to critical illness insurance, available at www.abi.org.uk.