Doctors, nurses and insurance professionals should be disqualified from taking out critical illness cover because they use their insider knowledge to receive a windfall payment, says Universal Provident.
The insurer, part of the Berkeley Morgan Group, says that medical and insurance professionals make a disproportionately high percentage of claims for critical illness within the first six months of taking out a policy, up to 20%.
The company also points out that, because the UK market pays claims on the 'diagnosis' of a critical illness, such as a heart attack, many claims are paid to people who may still be able to work despite their illness and therefore have not actually suffered any financial loss.
UP says these claims are pushing up the price of premiums.
UP advocates using the French approach of basing claims on whether the policyholder is unable to carry out certain activities that cause them financial loss.
"Policies should be defined in terms of financial loss only, in a bid to bring claims down and appeal to a bigger market place," said UP managing director John Pardoe.
Critical illness, currently estimated at about a million policies, is sold mostly on the back of mortgages.
It was originally called 'dread disease' cover in the late 80s, but was soon rebranded after a very poor take-up.
UP, which is to launch a critical illness product in June, says premiums must be cut if the market is to gain popularity.
A typical 40-year-old male non-smoker currently pays about £40 a month for £100,000 of life assurance and critical illness cover.
Pardoe is accusing the medical and insurance professionals of hiking up premiums by using insider knowledge.
"One morning they wake up, feel a lump and decide to take out a policy – before they have a check up," he said. "This sort of insider dealing puts the price up substantially. Excluding this 5% of the population will have a significant impact on the premiums paid by the rest, which seems to me fully justifiable. "It is not fair that a large proportion of our clients' contributions should subsidise those in the know."
A BMA spokesperson said: "We firmly reject any allegation that doctors would act dishonestly."
