Non-contestability move abandoned by Axa
Thu, 09 Apr 2009
Axa is discarding plans to launch a life insurance product that guarantees to pay claims in full, even if the policyholder has not fully disclosed.

According to Graham Harvey, managing director protection, there was a lack of consumer desire for a term life policy with an in-built two year non-contestability option. The insurer did a trial run with the option, which comes as standard in the USA, with broker LifeSearch and if successful, planned a nationwide launch later this year. It guaranteed full payment on death after a two-year period even if the policyholder had not disclosed important health information on their application form.

Mr Harvey said: "We haven't found it to be successful really. We tried it out but the truth is we found it difficult to communicate the option with the consumer and it's fallen off the radar."

The issue of non-contestability caused controversy after the Law Commission proposed in 2007 to introduce a five-year option into protection policies . It said the move could help remove accidental non-disclosure and boost consumer trust in protection.
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