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……..and could you be paying less??
If you have a significant health condition such as diabetes or heart disease and your application for life insurance is accepted, almost always you can expect to pay higher premiums because of your health condition. Insurance companies charge more to cover the higher risk of the policy resulting in a claim.
But have you ever stopped to consider how the extra amount the insurance company wants you to pay compares with the rest of the market? If you did and you looked into this further you might be very surprised at what you might find.
Consider this example – Sarah and Sue are twin sisters aged 40, both non smokers and each requires £180,000 term life insurance over a 25 year term. The only difference between Sarah and Sue if that Sarah has no significant health conditions, whereas Sue has insulin controlled diabetes with average control.
Sarah is able to purchase the required cover from insurance company A at £15.34pm with insurance company B offering her the same cover at £15.73pm – or about 2.5% more than company A.
But for Sue its a different story. Due to her diabetes Company A’s premium increases to £28.08pm. But company B now want a whopping £48.81pm! – which is now over 73% more than company A, or an extra £6,200 over the whole term of the policy.
So why does the differential go from 2.5% to 73%?
The answer lies in the different underwriting decision that that the company A and company B make after looking at the medical information. Not all companies make the same premium pricing decisions. In fact each UK insurance company generally has well over a dozen different premium ratings bands from which to choose when deciding which one to put you into and the key thing is that they dont all choose the same banding!
The moral of the story is that if you have a significant health condition shopping around is even more important than normal and could save you a small fortune. Even if you have alreay purchased cover in recent year after being diagnosed with your condition it is worth doing some research to see if you can save yourself some money.
Finally if you find thought of doing the necessary daunting (which it certainly can be) why not get a specialist broker to have a look for you.
www.moneysworth.co.uk offer a no fee life insurance shopping service for people with health conditions. Its simple to use and Moneysworth do the research for you. You can also call with your enquiry on 0845 430 5200.
I have just read an article in todays Cover Magazine here http://tinyurl.com/7dlbkwe in which Zurich’s head of underwriting is quoted as stating that huge numbers of applications received contain ’embellishments’ of the truth about applicants’ health details.
Why would anyone wish to take out life insurance using information which if succesfully contended at claim stage by the life company might lead to the claim being disallowed? How pointless is that? In stead of (presumably) saving a bit on the premiums, non disclosure risks wasting every penny of the premiums.
Of course in such cases it won’t be the person who is insured who will ever know. It will just come as an extra horrible shock to those who are left. Messy!
As so many of our clients at Moneysworth have pre existing health conditions (including diabetes, heart conditions and other health conditions), it is common for life insurance companies to write to our client’s doctors for medical information before making a final decision. Though on the face of things this might be seen to cause a degree of anxiety during the waiting period, the reality is that at the end of the process clients can feel extra peace of mind, knowing that the insurance company holds a report from their doctor.
In fact in many cases clients say to us that they would prefer the life company to write to their GP so that they can feel safe knowing that medical information HAS been disclosed!
And of course by using Moneysworth our clients know that we have properly researched the market to find the best solution for them individually. Which is important when you consider that different insurance companies charge widely different prices for people with the same health conditions.
So if you have a health condition and want to apply for life insurance make sure that you fully disclose your health information and if possible use the services of a life assurance broker who really does specialise in helping people with pre existing health conditions. That way you will know that you are fully covered and at a good price.
Whether you have diabetes or whether you are concerned about the possibility of being diagnosed with diabetes in the future you should take a minute to review your life cover. If you need more than its probably a good idea to act sooner rather than later.
Here’s why.
Currently Diabetic? – Once you have started your life cover, the terms (including the premium amounts) are generally guaranteed for the rest of the policy providing that continue to pay your premiums, irrespective of future changes in your health. Delaying taking out cover will generally end up costing you more money when you take out cover at a later date because you will be older. It may also cost you more because of the progress of your diabetes, especially if you develop more complications such as retinopathy, neuropathy or kidney issues. So again arranging your cover now protects you from the effects that future changes are likely to have if you delay. Worse still some future health developments could mean that it becomes impossible to be able to obtain life insurance. One highly relevant example of this would be the future development of any heart issues which is a significant additional risk factor for diabetics. Unfortunately no mainstream insurance companies will offer life cover to any diabetic, type 1 or type 2, who also then goes on to develop a condition such as angina or who has a heart attack. However the life insurance policy terms for those diabetics who arranged their life cover before they developed any heart conditions are still guaranteed, which also means that if death accours as a result of a heart attack you are still covered.
Not Currently Diabetic But Worried About Being Diagnosed With Diabetes In The Future?
You would also be well advised to review your life cover now rather than later. Now you may still be able to obatin life cover at lower premium rates and in the absence of any significant existing health factors there is a good chance that you may be able to so at ‘normal’ premium rates, which are the cheapest premium rates. Again if you take out the cover now these premium rates are generally guaranateed. If you delay sorting out your cover until you are diagnosed with diabetes, expect to pay higher premiums and in some cases much higher premium rates. Also if you delay until you are diagnosed you should expect to experience difficulty in being able to arrange some other valuable benefits, for example critical illness cover. This could mean for example if the purpose of the life insurance is pay off a mortgage that the option to include insurance to pay off the mortgage if you have a heart attack is simply no longer available to you even though the risk of it happening has increased.
I have been trying to get my ahead around some statistics that I came across yesterday.
Sainsbury’s commissioned the research looking at how many people in the UK had mortgages with no life cover in place to repay the outstanding balance. The results show some surprisingly big numbers, much bigger than most would perhaps guess.
Firstly the total figure of mortgages without life cover is given at £245,000,000,000 – thats a quarter of a trillion. But ‘billions’ and ‘trillions’ are everyday newspeak terms now, over used by both politicians and news reporters these words have become a sort of TV litter which we therefore tend to ignore as part of the familiar landscape.
Dig a bit deeper into the Sainsbury report figures though and we start to find more meaningful statistics.
The number of people with no life insurance to cover their mortgages? Just under 7 Million, or to put in a more meaningful way that equals just over 4 in every 10 mortgages. The report goes on to break down this figure between different age bands, as follows
Age Percentage of mortgage holders unprotected
18-24 62%
25-34 38%
35-44 33%
45-54 30%
55-64 55%
65+ 58%
Of course within these figures there will be mortgage holders who have valid reasons for not having life cover. The biggest such group will be single people with no dependants – fair enough. Another group might those with significant personal wealth.
But what about all the others? What about the significant majority who are not particularly wealthy but who do have dependent partners and/or families? What about the growing number of older people who find themselves with mortgages much later in life than they had originally anticipated? What are the reasons why these mortgage holders choose to have no life cover?
Here are some of the common reasons people give when asked.
”I’ve never really thought about it.” –
”Its a waste of money – its (my death) will probably never happen ”
”Its too expensive – I can’t afford it”
”No one will insure me with my health conditions”
But for the moment I should mention one other factor which I suspect lurks in the background for many and that is fear. Fear is a great inhibitor in all aspects of life. Fear changes our behaviour, it makes us more cautious, it makes us avoid action, fear makes us hide.
Generally people tend to fear the unknown. I am not a professional psychologist but based on my own observations fear is especially to do with a future outcome that is not known. Often the reason why people don’t face up to their fears is because they are scared as to what the outcome might be if they do. By avoiding action we feel like we are keeping the possible undesired future outcome at bay. Mostly its a subconcious kind of response.
So how does ‘fear’ apply to this issue of life cover for mortgages?
Perhaps underneath these figures many people are frightened about the questions they may be asked if they do apply for life cover. Perhaps they are frightened of having to reveal ’embarassing’ personal medical information about themselves.
Or perhaps they fear the final outcome – the fear that if they apply they they might get turned down and all that that might mean. For example it could confirm their own worst fears that they are going to die sooner rather than later, or in some way mark their financial credit record making it more difficult for them to borrow money in the future if they applied for a loan or mortgage. So some people might choose to avoid applying for life cover in order to avoid some sort of final judgement which they fear might finally mark their cards for good.
But of course fearing something does not mean that it is going to happen.
The problem is that many people are needlessly putting their families at risk by continuing to take no action. Put bluntly if you have no life cover for your mortgage on your family home then your home is at risk. If you have a family you owe it to your family to seek the appropriate life insurance in order to protect the family home for them.
Of course this for many will involve confronting a fear of the unknown.
But if only people with such fears knew where to look they might be quite surprised at the outcome. Here at www.moneysworth.co.uk we offer a specialist service for people with pre existing health conditions who are seeking life cover, for mortgages or for family protection (for other reasons too). Our service is confidential and non judgemental. We have over a number of years developed and refined a process which is designed to help customers find best outcomes. Each case is indivually researched. Further more our service is fee free to our customers and is with no obligation. Therefore it costs nothing to try.
The results are very encouraging. It should be said that we are not able to offer all customers a 100% guarantee that we will be able to find the life cover that they seek but we are able to help the majority, many of whom have been turned down elsewhere before coming to us. Very often the premiums acheived are considerably less than the customer originally feared.
Customers frequently express a high level of satisfaction with our service and often say that a great weight has been lifted for them. With the peace of mind knowing that their dependants are now protected they no longer need to live in fear.
We wanted to share some good news.
We were recently approached by a lady who was looking for life insurance. Aged in her late 50’s our client had suffered from breast cancer a number of years ago from which she had been in complete remission for a number of years. She also had one or two other conditions which while less significant would often with most insurance companies result in having to pay additional premiums.
The good news is that we were able to obtain life cover for this client at ordinary rates with no increase in premium to cover her previous serious health condition. The life cover includes full cover for death by whatever cause, including cancer(and including breast cancer) and the premiums are guaranteed not to increase in the future.
This is a great result!
The outcomes for life insurance applications from people who have suffered breast cancer in the past,l depend upon a number of factors.
Firstly the person must be in remission.
Secondly it is more common for there to be additional premiums charged to cover the extra perceived risk.
The amount of extra premium will typically depend on a number of different factors including the amount of time since the end of treatment (surgery, radiotherapy or chemotherapy) and the original sizing and staging. Not every life insurance company will rate the same way and this is where it pays to use the services of a specialist broker such as Moneysworth. In the above case we were able to obtain £45,000 for less than £30pm.
It is also worth mentioning critical illness cover.
It is often assumed that critical illness cover is not available for anyone who has been previously diagnosed with breast cancer. However while this remains true for some cases it is no longer necessarily correct in all cases. For cases where the initial staging was low and where some time has passed since treatment finished, not only might it be possible to obtain critical illness cover, it may also be possible to do so at very competitive premium levels too. Any future episodes of breast cancer will be excluded from the list of critical illnesses covered, as will any other critical illness which is caused by the initial breast cancer, but apart from that the full range of other critical illnesses normally available will be included in the policy.
So, if you have had breast cancer in the past, your prospects for both life cover and critical illness cover could be brighter than you think.
How soon can someone apply for life insurance after suffering a heart attack?
This is a question we are often asked as we receive an increasing amount of enquiries from people who have suffered a heart attack (myocardial infarction). For those affected it is not surprising that their minds should turn to this subject. For having survived a heart attack we are normally given a little while to recover and for many this provides time to consider what the future might hold, especially for our familes and those who financially depend upon us.
For some it can be worrying to realise that they have insufficient life cover to repay the outstanding balance on the mortgage. This means that in the event of their death, amidst and that that would mean to their nearest and dearest, the family home may be at risk as well!
The mind then turns to questions about how difficult it might be to obtain life insurance following a heart attack and how long it might take to arrange for cover to be in place…………..
Well generally speaking the prospects are often better than might at first be assumed.
Firstly if you were over the age of 40 at the time of your heart attack and you have only had one heart attack there is a good chance that you will be able to obtain life insurance. However if your heart attack was severe or if you have further health conditions (eg diabetes) then you may find it difficult to obtain life cover.
Just how long it will take to obtain life cover after your heart attack will vary from one insurance company to another. Generally speaking most life insurance companies will be prepared to offer you cover twelve months after the heart attack and some will even consider offering terms six months.
It may even be possible to do even better than that! We know one or two life companies who may consider applications one month after the client suffering a heart attack, depending on the overall picture.
So if you, or someone you know, has recently suffered a heart attack, if you are worried that you have insufficient life cover in place to sufficiently protect your family, if you think its probably too late to get life cover……… don’t despair. It might be easier to get life cover than you think.
