What relevance does the Defaqto 5 star rating guides have?

Oct 5, 2011   //   by Daniel Morris   //   Insurance  //  Comments Off on What relevance does the Defaqto 5 star rating guides have?

Stressed womanMany people are unaware that there is a company called Defaqto that specifically deals with researching and comparison in the financial industry. This is not necessarily just on critical illness insurance but on other aspects of the financial market such as general insurance, mortgages, bank accounts, credit cards, savings, investments, pensions and life and protection cover.

With regards to how this company affects a critical illness insurance provider, it generally compares the majority of the insurance providers in the market within the United Kingdom. It looks at the level of covers that are offered by each individual insurance provider and assesses them and then they award the company with a star rating. This generally ranges from 1 to 5.

Not only does defaqto look at insurance companies, but they are responsible for comparing and researching, bank accounts, loans, mortgages and many others. They even have their own website to what show you what exactly they cover and exactly what they do not.

The scoring system that Defaqto uses to score critical illness insurance policies is called Data Numerical Analysis or for short DNA. Defaqto look at least one hundred and one features, benefits and parts of each cover provided. These are then scored from 1 to 5, 1 of which is the lowest level of the scoring and 5 of which is of the highest end of the scale. The reason behind this being done is to help customers decide upon which cover and provider best suits their needs.

There is however one thing to take into consideration, defaqto does not look at the premium of the plan because an applicant’s age, sex etc can affect this and this will of course change from one person to the next.

The Defaqto’s main aim is to be there to aid consumers and financial advisers in their decisions on looking for and choosing a provider when it comes down to financial aspects, these can be products such as mortgages, insurance etc. This will allow them to look before they actually buy a product and being able to see what they offer and if it suits theirs or their customers needs. If a customer is unsure about what cover they need or the insurance provider to go with, the defaqto star rating can help with their decisions because it rates the companies in accordance to how they fit into the financial market.

So if you have seen whilst possibly looking around for a form of critical illness insurance, even if it is on your existing policies paperwork or whilst shopping around for other type of products as mentioned above and if the provider you are looking at has a certain amount of stars then this is why. Defaqto have graded their policy that they offer and awarded it how they feel necessary the relevant star to coincide with the product they sell and have on offer. Defaqto are not a company that offers advice or can point you in the direction of where you need to go, however they can in fact provide you with factual information to enable you to make your own mind up on which insurance company to go with and which not to.

The aspects that Defaqto take into consideration when rating an insurance provider’s insurance are:

  • The range of conditions that the provider covers.
  • The exclusions that they have in force. The amount and type of standard exclusions that are applicable to all applicants that are in force are taken into account.
  • If waiver of premium is available on their policy or not.
  • If any buy back options are available by that specific provider.
  • The services that insurance provider has available. These are support services such as a claims support line to help people cope with their illnesses.
  • If they offer a guaranteed insurability option.
  • If they offer sum assured indexation on their plans.
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