The ABI is planning to rebrand and standardise definitions of the Total Permanent Disability (TPD) benefit in Critical Illness (CI) insurance policies, in an attempt to improve clarity for consumers.
Following an extensive consultation, the trade body is proposing that a new set of standardised definitions will go hand-in-hand with improved education for consumers, financial advisers and sales forces.
The ABI consultation was focused on measures to improve customer understanding of TPD, and therefore to reduce the number of declined claims. Consequently, the ABI is seeking 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).
It also wants to 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, as well as test the proposed definitions with consumers.
The ABI will also consult all stakeholders on the new definitions and 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.