ABI to make CI disability clear

The Association of British Insurers (ABI) is to standardise definitions of Total Permanent Disability (TPD) in Critical Illness (CI) insurance policies and boost education for consumers, financial advisers and sales forces.

The ABI says this will reduce the number of declined claims. After consultation the ABI has agreed to:

• Propose a set of clear and easy to understand standard definitions that build on the concept of TPD (for example, removing use of the words ‘total permanent disability' that cause so much confusion for consumers).
• Produce a standard set of educational materials for insurance companies and advisers to use, explaining clearly the changes and what customers can expect from their policies.
• Test the proposed definitions with consumers.
• Consult all stakeholders on the new definitions.
• Issue a new Statement of Best Practice for Critical Illness Cover that will include the new set of definitions.

Nick Kirwan, the ABI's assistant director, health and protection, said: "It is vital that customers understand what their Critical Illness policy does and doesn't cover. The approach we are adopting builds on our previous work to create more descriptive headings and clearer definitions.

"We were very pleased with the level of response to our consultation. We heard that people want standard definitions, and that education and clarity are key to improving understanding. We have more work to do, but we now have a clear view of how to go forward and achieve these aims."