Gen Re expresses some concerns about terminal illness benefits, and a significant proportion of discusses some interesting analysis on survival rates for clients following terminal illness claims. "Insurers’ terminal illness (TI) definitions are conditional on the expectation of death occurring within 12 months of a diagnosis. Insurers generally make TI claims conditional on this prognosis being confirmed by their own Chief Medical Officer or an independent medical specialist.' Click here to read the full article.
Twelve months is also the baseline for TI benefits in New Zealand, although some insurers offer 'advance' benefits which allow, for certain conditions, some of the sum insured to be advanced if death is expected within 24 months.
Gen Re has a table showing survival rates after diagnosis. Insurers may be less pleased, but advisers and clients may be interested to know that significant numbers of people survive longer than predicted. I think that underlines the value of terminal illness benefits generally.
Insurers, however, must reflect again on their slightly uncomfortable relationship with the medical profession. It is already well known that, if you have private medical insurance, your doctor is far more likely to refer you for a test or to a specialist – or both. I have direct experience of that. Most doctors I know prefer to stay firmly on the side of optimistic support for their patients in the face of terminal illness, however, if the patient has their policy document with them, that might be a slightly different conversation.