An initiative has been launched by Norwich Union to help tackle the problem of life insurance and critical illness claims being rejected due to non-disclosure.
According to Norwich Union, around 12% of life and critical illness policies were rejected due to non-disclosure in 2005. In addition, the ABI states that one in five claims in the UK are declined each year due to non-disclosure by customers of their medical information and policy conditions not met.
As part of the scheme, a first for the industry, Norwich Union will contact 5,000 policyholders to review their initial applications and notify the company of any medical details not disclosed on their original forms. It is hoped that the pilot will allow customers to correct any details which might invalidate future claims.
Information provided by customers will be used to establish whether changes in premiums or re-rating are required on current policies.
Outlining the reasons for launching the scheme, Willie Mowatt, director of risk products at Norwich Union, says: “We want to be able to clearly advise people who think they may have non-disclosed how to proceed if they believe they may have missed something off their application form. We feel this is the right approach to try to help customers prevent non-disclosure in the event of a claim.
“Life insurance and critical illness payouts offer great peace of mind at a time of great need. Having a policy declined due to non-disclosure just adds to the stress at what is a very difficult time.”
The pilot is due to begin on 2 July and, if successful, Norwich Union will consider rolling out the scheme to more customers.
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