News & Views

Yesterday the Advertising Standards Authority listed the 10 most complained about adverts for 2015. Several of the ads related to health issues, including two smoking related advertisements, but the one that really caught my eye was the British Heart Foundation advertisement.

In the advertisement Ben is seated in his classroom at his desk. The classroom is full but his father crouches down in front facing him and Ben asks him why he is there. His father tries to tell him in a quiet voice that he won’t be there anymore and that he is sorry. As both Ben and the viewer try to take in what is being said, the headmaster appears at the door and asks Ben to come outside, by which time you realise that Ben is about to be given the life changing news that his father has died of a heart attack.

Like many when I first saw this advert I found it very moving. The advertisement succeeded in conveying the immediacy of the shock of receiving such terrible news, completely out of the blue. Indeed such is the sudden impact of the shock that Ben simply seems to be trying to process the information he has just been given, as though he has not had time yet to emotionally react or think about what it means. By the time the headmaster opens the door, you feel that you know what is coming next. You are left wondering at how Ben’s life has changed forever in an instant by an outside event over which he had no control. You feel sorry for Ben, desperately sorry.

One reason why this advertisement chimed with me is that I lost my own father prematurely to a heart attack. I was present when the heart attack occurred and I remember sitting with my arm around my mother in the ambulance speeding towards the hospital wondering what the outcome would be. I remember waiting at the hospital as other family members arrived and then after sometime being given the final news. Little did I know then that a number of years later I would experience a similarly shocking event, a phone call in which I would be given the devastating news that another member of my immediate family had died suddenly, leaving a young child.

However the other reason why I think this advertisement is so strong and believable is because it leaves the viewer wondering what the future holds for Ben now that his father has died. My own experience has taught me that the consequences of someone passing on can be profound and long lasting for other family members in all sorts of ways. A sudden death in the family is a game changer for everyone.

I have to confess that when I first saw the advertisement, before I knew the identity of the advertiser, I thought it was advert for life insurance. It is not clear whether or not Ben’s father had life insurance and of course for Ben and his family the first things on their minds would be the funeral arrangements, their grief and their other emotions. However sooner or later practical questions would need answering. How much capital and income will Ben’s mother have? If they have a mortgage is there enough to pay it all off? If not will Ben’s mother have sufficient income to pay the mortgage and keep the family going, or will the family need to move and will Ben have to change schools? What about further down the line as Ben grows older? How will the choices and options available to him match up with what his father would have wished for him? To what extent might those options be limited by a lack of available funds?

In my own case, my father was turned down for life insurance and he was therefore unable to leave any significant financial resource for our family. Thankfully there have been significant developments since then both in terms of the availability of life insurance for people with health conditions and in the medical treatment of heart conditions.

But getting back to the advertisement who were the complainers, why were they complaining and were they right to complain? The advertising standards authority said there were 219 complainers who considered the advertisement to be “distressing for adults and children” (although it seems that steps were taken to avoid showing the advert during children’s programming).

It would not be surprising if the advertisement evoked distress in the minds of some who had lost a close family member or friend and inevitably some people might be upset by what they saw. However just because it might have made for difficult or uncomfortable viewing, does that mean the advert should have been banned? The positive purpose of the advert was to draw public attention to the valuable work of the British Heart Foundation and to show us that heart disease can be fatal with profound life changing consequences. Hopefully the advertisement might have inspired many to consider what now lay ahead for Ben and others like him similarly affected. Viewers might also have been moved to consider what action they might take to reduce their own coronary risks (lose weight, more exercise, stop smoking, etc.) and perhaps to review whether they have sufficient family life insurance protection. Viewers might also consider getting involved in supporting the work of the BHF. For example the Nation Of Lifesavers project aims to make significant improvements in the way the nation deals with cardiac arrests, so as to make a much needed step change in the number of survivors of cardiac arrest outside of hospitals.

Finally, it’s worth mentioning that there is clear evidence in the UK that many families do not carry sufficient life insurance to protect and support the needs of the family should the worst happen. It is frankly astonishing to read various researched reports consistently suggesting that at least 50 % of mortgage holders do not have life insurance to cover their mortgage. One of the reasons sometimes given by those who perhaps should have life insurance but who don’t, is that they don’t like talking about death. But sticking your head in the sand because you feel uncomfortable thinking about death is no excuse for leaving your family and children exposed to the financial consequences of your premature death.

So hats off to the British Heart Foundation for their thought provoking and powerful advertisement. We applaud you!

Smoking and Life Insurance

At this time of year, many people are sticking to their New Year’s resolutions and, for some, giving up smoking is one of the biggest challenges. Quitting smoking is beneficial to your health, but how does it affect your Life Insurance?

1. Smokers pay higher premiums than non-smokers – but how much higher?

For a new life insurance policy, a 30-year-old can typically expect to pay 66% more, a 45-year-old 112% more and a 60-year-old 136% more. Proof (if proof were needed) that smoking is not good for your health or your wealth! For further information on the Health Risks Of Smoking (NHS).

2. What about ex-smokers taking out a new Life Insurance policy – how are they dealt with?

Broadly speaking, it will depend on how long ago the applicant gave up smoking. For a life insurance company to charge a non-smoker rates, the period since last smoking needs to be least 12 months. ‘Non-smoking’ in life insurance company terms means no use of any tobacco or nicotine products for 12 months, which even includes E-cigarettes, patches or gums.

A ‘social smoker’ or occasional smoker is still classed as a smoker – and charged as a smoker!

3. Can insurance companies test for smoking?

Yes. The test used is called a cotinine test and a life insurance company can request such a test as part of their assessment process for a life insurance application.

Indeed, if the insurer requires you to attend a nurse screening or medical exam as part of the process, and you’ve told them you’re a non-smoker, they will test you at that time anyway. In addition to this, many peoples’ GP medical records contain information about their smoking habits.

4. What if someone is now an ex-smoker, but they have an existing Life Insurance policy taken out while they were still a smoker?

There may be the potential to get a lower premium rate – but it won’t happen automatically, and you will need to take action in order to explore this potential option. Some companies will, if requested, be prepared to alter the premium on your existing plan from smoker to non-smoker rates, once they have satisfied themselves of your non-smoking status (12 months non-smoking – and expect to be asked to do a cotinine test).

However, the majority of insurance companies will not be prepared to change your existing policy terms and therefore in order to obtain non-smoker premium rates you will need to make a fresh application. It is very important that if you do make a new application that you do not cancel your existing policy until the new policy has started. This is because a new application means a fresh assessment, taking into account your age (obviously you will be older) and any changes in your health. Remember that, for some people, these factors could make the final ‘non-smoker’ premium for the new application more expensive than the old policy ‘smoker’ premium rate. Indeed, in a few cases, health changes might be so significant that a new policy is not available.

5. If someone is thinking about giving up smoking – is it best for them to wait until they become a non-smoker before applying for life insurance?

No. Waiting is a big mistake and could cost you dearly! Nobody likes paying more than they need to and you might be tempted to wait until premiums become cheaper.

But there are a number of risks with this approach:

Firstly, and most importantly, waiting until you qualify for non smoker premium rates leaves your loved ones with no cover and still fully exposed to the financial consequences of you dying before you complete the qualifying conditions for non-smoker premium rates.

Secondly, changes to your health might occur before qualifying for non smoker premium rates, which could mean that the cost of cover actually increases and, in the worst cases, becomes unavailable – which could amount to a potential disaster.

Thirdly, as a smoker today you don’t know how long in reality it may take you to complete a full continuous period 12 months of non-smoking. When will you quit? How long will you use nicotine substitutes? Will you have an occasional cigarette? For some, despite their good intentions, they may never reach a point where they have not smoked or used any nicotine replacement products for 12 months.

If higher premium rates for smoking are a real concern then rather than doing nothing it is better to consider taking out a lower amount of cover now, with a view to reviewing the amount of cover as and when non smoker premium rates become available.

Tips for smokers applying for Life Insurance:

  • Honestly disclose your smoking status when applying for life insurance.
  • Don’t delay applying in the hope of qualifying as a non smoker at some stage in the future.
  • If you become a non smoker, review your protection cover, you could save a lot of money.

It’s worth also remembering that the potential longer term consequences of smoking involve a greater risk of certain health conditions, several of which (such as heart attack, lung cancer, other cancers, stroke, etc.) are potentially claimable conditions for Critical Illness insurance policies.

What is generally not realised nor fully understood is that millions of people in the UK are unable to obtain a Critical Illness policy due to an existing health condition. We tend to pick up health conditions as we age and smoking increases the risk of certain health conditions. So, for smokers, it might well be a good idea to consider taking out Critical Illness Insurance sooner rather than later – especially for younger smokers, for whom premium rates are often significantly lower compared to older smokers.

January 29th, 2016

Posted In: Uncategorized

We’ll be heading to London this week for the prestigious Health Insurance Intermediary Awards where we’re finalists in two categories.

We’ve made the shortlist in the following categories:

  • Best Intermediary for High Net Worth Clients
  • Best Protection Intermediary

As an intermediary specialising in helping those who may be considered high risk for insurance, we’re delighted to feature in these shortlists against some great competition.

The awards will be taking place at London’s Grosvenor House on Thursday 15th October 2015 with over 900 industry professionals and experts expected to be there.

Wish us luck!

 

A tricky shareholder protection case involving an older director with a serious heart condition and a healthy younger director, requiring careful consideration, knowledge and planning to reach a good workable final solution, while being careful to avoid a few banana skins on the way.

When our client approached us to help him find £500,000 life insurance, both he and we knew that it wouldn’t be easy. Aged 55 our client had severe artery disease, sufficient to have required a total of six stents to be fitted over a three year period. The client wanted to ensure that if he died his wife would receive £500,000 and that his 50/50 business partner would be left with 100% of the business.

We began by further researching the client’s medical profile and potentially available options with insurance company underwriters. A specialist insurer suggested they might be able to consider offering terms at an indicative premium of £1182pm, but we felt we could do better! Medical underwriting requirements included full GP reports with cardiologist letters and a medical examination. When final underwriting results came through we had managed to obtain terms at a premium of £365pm. Brilliant!

However the job was still not finished.

A further issue related to the valuation of the business which it turned out was worth significantly less than the amount our client wished his spouse to receive in the event of his death.  We explained that there was a straight forward solution to this problem. Rather than conflate the need for a sufficient amount of death benefit for his spouse with the requirement to ensure that he and his business partner received each others shares in the event of death, we suggested he first take out a shareholder protection policy based on a fair and justifiable business valuation. The realistic business valuation given was £200,000 so we suggested a policy for £100,000.

Secondly we suggested he take out a separate life insurance plan for the benefit of his spouse as a Relevant Life Plan. Not only would he effectively pick up tax relief on the lion’s share of the total protection premiums but it also helped to significantly reduce the impact that ‘premium equalisation’ for shareholder protection would otherwise have had on his business partner, who of course would be liable for personal income tax on our client’s shareholder protection life insurance premiums paid for by the business. This was especially significant given that the premiums for his cover were 770% of the cost the premiums for his fellow shareholder, due to his business partner being significantly younger and with no rateable health conditions.

We also gave the client the option (which he took) of further increasing his total life cover by a further £100,000 bearing in mind how difficult it might be to obtain more cover in the future should his health change, as £600,000 was the maximum level the insurer could offer without the need for any further medical evidence.
We arranged the necessary policies for both him and his business partner (£100,000 shareholder cover and £500,000 relevant life cover each) and assisted our clients with the necessary trust documentation for all the policies, making sure that in the event of a claim the right amount of cover ended up in the right place quickly and without any further tax liability. We also provided them with a draft life company double option agreement for them to share with their lawyer.

Obtaining Critical Illness cover for anyone with Type 2 Diabetes can be very difficult, but it is possible in some circumstances, as one of our recent cases demonstrates.
The first problem is that most insurance companies will automatically decline any application for Critical Illness cover from a person with Type 2 diabetes, irrespective of positive factors, such as good control and lack of complications. So it’s difficult for consumers to know where to go.
Normally buying life insurance and critical illness cover can be done in many places like the bank, large comparison websites and financial advisers, however if your personal circumstances mean that you do not fit the standard mould, you would be well advised to use the services of a life insurance broker who has particular specialisation in dealing with people who have health conditions.
Moneysworth has been successful in arranging Life and Critical Illness cover on a number of occasions for people with Type 2 Diabetes, as a recent case demonstrates.
A gentleman in his early 40’s made an enquiry on our website: www.moneysworth.co.uk. Type 2 Diabetes had relatively recently been diagnosed, his control was good and he didn’t have any diabetic complications, but he was overweight. With a raised BMI (Body Mass Index) of 31, this made finding cover even more difficult. He wanted Life and Critical Illness cover and had a specific budget in mind for his premiums of £75 per month.
As we do in all cases, we researched the whole market for the client to see if life and critical illness cover would be available. Our research indicated that only one insurance company would offer him cover, so we applied to them. The insurer wrote to his GP surgery for further medical information and on receipt of that offered a guaranteed premium policy for £75 per month, covering the client for Level Life or Critical Illness cover (without exclusions) of £75,350 over 23 years.
People with an existing health condition who have been declined elsewhere should not give up hope of getting the cover they want until they have used the services of a specialist life insurance broker. If a client wants to find out what might be available and apply, Moneysworth do not charge a fee. This means Moneysworth is only paid a commission by an insurer if we are successful. Remember if you’re unsure if a broker is a specialist, you could ask the question: ‘What percentage of your clients have pre-existing health conditions?’. At Moneysworth that figure is over 75%!

We have just received the following email from a new client.

”Just to let you know, your company has been really responsive and kept me well informed hence the reason I trust you to provide me with the life insurance. Another competitor just called and after many excuses why they were late to come back to me they also said Aegon can insure me but I decline as you guys were faster, and far better in my mind (the other lot tried to come over the phone in a very posh manner which does not mean anything to me, service is the key!). Happy for you to share this with your colleagues and if required please post online as I am a happy customer”

Like all companies we are always pleased when our hard efforts to provide good service are recognised by our customers.

Through good service we’ve earned trust and ‘Trust’ is what our clients are looking for.