The term total permanent disability (TPD) will not be dropped from critical illness policies, the Association of British Insurers (ABI) has announced.
The ABI originally proposed to remove the clause from members' policies and substitute it with a set of carefully worded definitions. However, stakeholders who responded to a consultation were divided about move, with half rejecting it.
Nick Kirwan, the ABI's assistant director for health and protection, said: "We would have needed it to be unanimous to ban TPD. Nobody thought there was an absolutely perfect answer, but we want to find a way to make it better."
Attendees at a recent protection seminar held by Medicals Direct questioned the future of critical illness insurance and suggested that claims under the TPD clause highlighted the need for a hybrid critical illness / income protection proposition. Mr Kirwan defended critical illness as "the most successful new product launched in the last 50 years".




