Exclusions

Current practice in the income protection (IP) market is to apply exclusions (rather than applying ratings) for specific impairments. This is commonly done because the risk of future claim for that impairment may be very high, such that it would be unrealistic to apply a monetary rating that would adequately cover the risk. To the customer, this approach is likely to appear unfair - they are getting reduced cover for the same price as someone getting full cover, so would it not be fairer to reduce their price? This is a practice that has been applied on critical illness contracts (for in...