You’re in business and you’re cosy in the knowledge that you’ve got keyman\death\critical illness cover. In your mind, that’s one area that you don’t have to worry about. If the worst happens and you get sick, to the extent that you can’t run your business, the insurance company will pay an agreed lump sum to assist in your care or to employ suitably qualified personnel to keep the business going in your absence. Sounds good, doesn’t it?
Well, let me ask you a question. What’s your critical illness going to be? Are you going to have a stroke? A brain haemorrhage? Heart failure? Or will you be on dialysis as a result of kidney failure? Or, will you get a rare one that very few people have heard of?
As absurd as it sounds, this is the reality of your ‘cosy keyman’ cover. Choose your critical illness with great care or you will not be covered. Consider this…
In March 2011, I was diagnosed with a rare blood disease, Amyloidosis, which – without treatment – is progressive and fatal. Nothing in my background, nor my lifestyle, could have provided an early warning that I would get this illness. Even with treatment, the average life expectancy for a large percentage of patients is 5-10 years.
I got Amyloidosis and it made me very ill. It also put me onto an intensive programme of chemotherapy for four months with no guarantee of recovery. As a direct consequence, I was away from work for over a year and the inevitable happened. Sales dried up and a good little business of 12 years shrivelled away.
Sounds like there was no insurance cover in place, doesn’t it? Actually, there was.
However, Bright Grey Insurance – in common with many others that I’ve now had a look into – include three words in their product information that you would do well to consider before taking out a critical illness policy with them.
FROM. OUR. LIST.
That’s right. You are only covered for a critical illness if it’s on their list. Unfortunately, Amyloidosis is not on that list and, as a result, they declined to pay out.
In my opinion, this is wrong and the law needs changed to stop policies being advertised as ‘death and critical illness’ when the critical illnesses are being prescribed in this way. It’s not as if you can make a choice in advance.
To me, it would make more sense if the ‘effect’ of the critical illness was the determinant of the pay-out rather than the diagnosis itself. There is a precedent for this in the Equality Act and its predecessor, The Disability Discrimination Act. For people to be considered ‘disabled’ under the law, they need to prove that “they have a physical or mental impairment that has a ‘substantial’ and ‘long-term’ negative effect on their ability to do normal daily activities.”
I don’t think that it would be unreasonable to expect a similar definition being sufficient to determine if a business person is so seriously ill that they cannot carry out their normal duties over the long term.
So, dig out that cosy policy again and have a look for those three little words ‘on our list’.
And then decide which critical illness you want to have.
(You might want to consider reposting this as the more people who are aware of the issue, the greater the chances of change).
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