Chief Points About Critical Illness Cover

The chief financial regulator expressed its concern a few years ago that thousands of policyholders did not know what their policies covered nor how they.Those fears still remain true.

The Financial Services Authority said that research showed that providers, including financial advisers, supermarkets, insurers and banks often made no effort to find out if the cover was appropriate and little explanation was given to customers of how policies work.While most firms were working to adhere to higher standards, others carried on offering a poor service.

In the event that heart disease, cancer or other specified life-threatening illnesses strike critical illness cover pays out a lump sum.Often, it is people who are concerned about paying off loans or mortgages if they should be unable to continue working, who buy these policies.

There are two kinds: those with a guaranteed fixed premium each month and those where the monthly payments increase over time.Figures from the Association of British Insurers (ABI) suggest that, in total, there are in excess of 5m policies covering 12m people.An average policy will pay out 67,000 pounds.

These "protection" policies have proved controversial.While they might be beneficial, these "protection" policies have proved controversial and critics allege that not many people make claims.There is no data available on the number of claims made vis-a-vis the total premiums paid.The FSA review did reveal, however, that on average, 25 per cent of the claims made are refused.

In one case recently, a policyholder was diagnosed with cancer but medical teams could not specify which one.The claimant was informed it was unlikely doctors would know for certain until he was dead.

Until a diagnosis was available, his insurance company would not pay out.The claimant's family appealed realising that should he die, the company would pay out a life insurance policy worth 15,000 pounds rather than the critical illness policy which was worth more than 80,000 pounds.Only one policy can pay out.The argument with the provider caused added stress to the claimant.After a public fight, the insurer gave in and paid out on the policy for critical illness.

Which?, previously known as the Consumers' Association, said it thinks the situation is much more serious than the FSA claims and that sales of critical illness cover are at the centre of a far-reaching mis-selling scandal.

Mick McAteer, principal policy advisor, says finance companies, brokers and commission-hungry advisers, saw a chance to make huge profits.He said Which?had predicted the mis-selling that was seen in the pensions industry would be replicated in the protection business.

"Protection policies, by their nature, are complicated and the advisers selling them are often putting their commission before the needs of their clients."

His comments are on the back of complaints in parliament regarding the mis-selling of protection policies.

Lorely Burt, the Liberal Democrat MP for Solihull, says the FSA study reveals there is a high risk that policies are being sold to consumers who do not understand what they are buying or who don't even need them.She wants rule changes that would limit sales to financial advisers working under strict guidelines.

Mick James of Standard Life agrees that people need to be aware of the different insurance options rather than just opting for critical illness cover.Many people appear confused about why they want this kind of policy.Instead of just concentrating on the lump sum payout, they should question the reason they need such a policy because with many illnesses, especially types of cancer, the treatment can last for years which means that the money from the payout might run out quite quickly.It could be that an income protection policy or indeed family income benefit offers more economical premiums and pays out for a longer time period.

This article is continued under the headline: Look At The Small Print When Buying Critical Illness Insurance

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Tips When Choosing Your Credit Cards

If you are like most people who have reached the age of adulthood and have a job or a bank account and even minimal spending, then you have more than likely received numerous credit card offers both in your mail box and in your email inbox.When people start receiving these multiple offers for credit cards, things can get confusing and often people are left a bit bewildered about which offer is really the best for them and for their financial health.

A credit card can be a two-edged sword.They can be an excellent tool for money management and budgeting and can often help to simplify tracking household expenses, especially when you can get some of the special credit card deals.At the same time, when people use up all the available spendings on their cards and are undisciplined about how and when they used this easily accessible line of credit, they often put themselves in a terrible financial pit that can take them years to crawl out of.

In fact, there are many instances when young and inexperienced people find themselves with new credit cards with thousands and thousands of dollars of available spendings on them.In no time flat they can easily push their cards right to the limit if they are not careful about how they handle this important resource.

When this happens, the person who is new to credit and simply excited about what they are able purchase with their new credit lines are in for a very rude awakening when the bills start coming in and the interest starts to be added to their balances.Often, the interest charges will push the novice's balance right over their limit and then they are also looking at an immediate hike in their interest rate, plus fees and penalties for being over their limit.

This can set the stage for a spiral of indebtedness that can seem impossible to escape from and realistically can takes years, if not decades, go get free of.Because of this, it is important, especially for those who are just entering adulthood and taking on their first full time jobs, to have a very clear and detailed understanding of the terms and conditions that a person accepts when they sign up for a credit card.

Most of the credit card companies are eager to gain new customers who are willing to not only use their credit card, but who will end up carrying a balance on their card.This is when a credit card company makes its money, by charging interest on the amount of the balance that is left unpaid each month.

When evaluating credit card offers, it is important to scrutinize the details of the fine print before you sign the application and send it in or submit an online credit card application.Not only should you check for the interest rate that will be charged, but also for the types of penalties that you will be hit with if you go over your limit or if you are ever late on a credit card payment.

In many cases, credit card companies offer extremely attractive introductory rates on their credit cards, but they also have very harsh and exorbitant penalties in the fine print.Sometimes you will find that it is better to accept a credit card offer with a higher initial interest rate but with friendlier and better terms for the long haul.

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