I’ve just been given a sheet of statistics for critical illness claims of different insurance companies.

It makes for interesting reading, and may be quite useful for when it comes to selecting a company to provide Critical Illness cover for my clients.

So, the big thing about this style of cover is that people perceive that insurance companies wiggle on their claims and actually, the evidence is that this is either a ‘old problem’ or it was never a problem, but occasionally there is a big fuss when it happens, making it seem like a big problem.

Anyway, the 2009 figures show stats for 11 providers.

They show that the 11 paid out on between 88 and 93.6 of claims and that sounds pretty good. However, it does mean that between 6.4 and 12% of claims are rejected and that doesn’t seem so good. When you look at the ‘rejected’ figures, you’d probably want to be at the better end of the table.

There are 2 reasons for a company not paying out on a claim. The 1st is ‘non disclosure’ – where the insurance company didn’t have all the information up front. A good example is smokers saying they don’t smoke, but sometimes illnesses are ‘forgotten about’ too.

The other reason is that the critical illness in question wasn’t on the list of things covered, or maybe they were, but you weren’t ‘bad’ enough. Amputation of a limb is pretty clear cut, but the amputation has to be above the wrist or ankle – if it isn’t, and you claim, it will be rejected. The same with ‘total and permanent blindness’. If you become blind in one eye, if you claim, it will be rejected.

So, rejected claims aren’t necessarily a sinister thing, most people would take the attitude that ‘there’s no harm in trying’.

Non disclosure is probably not a problem these days either. Advisers, or certainly this adviser, is paranoid about non disclosure and makes his clients disclose every cough and sneeze.

My thought is that you’d expect all companies to have roughly the same experiences in both areas and they don’t. On the other hand, a ‘poorer’ company may have changed it’s processes or application form or definitions recently and have solved the problem.

I suspect, I’ll end up running league tables for my clients and if two companies have the similar premiums, and similar lists of critical illnesses, it could be one of the factors I could use to choose between the two.