Insurers are being praised for answering industry calls to cut premiums on protection policies where exclusions apply.
Zurich last week announced it is cutting premiums on its critical illness (CI) plans where exclusions are applied for cancer or Multiple Sclerosis, saying it is "the right thing to do".
It followed recent similar moves by Bupa, Fortis and LV=, while Axa and PruProtect are also mulling dropping premiums where exclusions apply.
An industry-wide campaign, led by broker LifeSearch and encouraging provider to cut premiums where exclusions apply, was launched last year.
Advisers say some consumers, previously turned off by what they saw as unfair policy costs, may now be encouraged to buy protection.
"There must have been many, many cases where people have decided against taking out a policy because it appeared they were being ripped off or disadvantaged in some way, so this is a very welcome move," says Alan Lakey, partner at Highclere Financial Services.
"[But] it is so obvious and so sensible one wonders why it has taken [insurers] this long to do it."
According to LifeSearch, some exclusions permit premium reductions of up to 40%, but Lakey says providers may understandably be a little more guarded.
"If an applicant is refused cancer cover, which would rule out around 60% of all CI claims, the theory is premiums should fall quite dramatically," he says.
"But then some conditions can lead to others so I can understand why some insurers are a little cautious there."
LifeSearch says it hopes more firms will follow suit, adding it is important underwriters consider the impact of exclusions to help get more policies on risk.
"Overall, providers have reacted positively to pressure on [this issue]," LifeSearch head of life office relations Emma Thomson says.
"Many underwriting managers have said they would like to introduce this but restrictive systems prevent them from doing so.
"I hope the necessary investment will not take an age and that we see more providers coming on board with this over the coming months and using this treating customers fairly difference to win market share from their slower-moving peers."
