Higher life insurance claims may be turned down
Recent reports have suggested that more and more consumers are becoming despondent and distrustful when it comes to the likelihood of insurance companies paying out on an insurance claim, and recent research carried out by a financial services support group has shown that higher claims may indeed be turned down by life insurance companies. The research into life insurance payouts was carried out by Threesixty and indicated that life insurance companies were less likely to pay out on a larger claim.
According to the results of the study up until March of this year the average amount of the claims that were being turned down by life insurance companies was around seventy thousand pounds. This was just ten thousand pounds more than the average amount of each claim that was paid out over the same period, which stood at around sixty thousand pounds. However, insurance companies do have a defence for this increase in rejections when it comes to higher claims.
According to insurance experts the reasoning behind the increased claims is that higher claims have more of an adverse financial impact upon insurance companies, and therefore tend to be investigated more thoroughly. And because of this more thorough investigation there are often instances where it is found that the policyholder has failed to disclose some important information that relates to the claim. In many cases this immediately results in rejection, as insurance companies state that policyholders should have provided this information when taking out the policy.
One of the researchers from Threesixty stated: "Our figures demonstrate it is absolutely essential that IFAs advise their clients to disclose all medical information at the point of application. Any potential problems should be pointed out to them at outset as part of good business practice, reinforced by the treating customers fairly requirements."
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