The ABI has scrapped proposals to change the name of Total and Permanent Disability (TPD) cover on critical illness (CI) plans.
It had previously proposed changing it to Irreversible Life-changing Disability but this has now been dropped following poor customer feedback.
However, new descriptive headings that were also unveiled alongside the name change will be retained, alongside a standard set of industry definitions.
This will be supported by an industry wide education plan to improve the understanding and reduce the number of claims declined, the ABI added.
Nick Kirwan, assistant director of health and protection at the ABI, explained why the decision to rename the category had been shelved.
"We have explored a number of ways to help make claiming TPD easier for customers, which did include changing the name of the benefit," he said.
"However, customer research did not strongly support this idea. After careful consideration we have now agreed standard definitions, training packs for advisers, an online hub of information and much clearer steps for customers which we believe will make the process easier and increase successful valid claims.
"Throughout we have taken a very inclusive approach to addressing this complex issue and we have had feedback from advisers, consumers, and a wide range of other stakeholders including regulators and the Financial Ombudsman Service," he added.
The new statement of best practice for CI policies will be issued in early 2011, with the TPD heading being extended to make the scope of the cover clearer.
As a result the education programme can apply to both new and existing policies.
ABI members will be required to implement the policy when making updates to their CI policies.
