In our previous article, we gave an example of how charity signposting works. A young father with a lifelong heart condition tried for over two years to find an insurer willing to offer him Life Cover. Then a UK heart charity providing him with a list of brokers who specialise in assisting people with health conditions to find suitable insurance.
Likewise, a growing number of financial advisors now signpost to us when they have clients whose health condition is deemed to be higher risk, and the firm struggles to find an insurer willing to offer Life Cover to those clients.
Heart conditions and circulatory conditions are among the most common health conditions we see in the clients referred to us by financial advisors.
There are currently around 7 million people living with heart and circulatory diseases in the UK – that’s over 10 percent of the population. An ageing and growing population and improved survival rates from heart and circulatory events (such as heart attack) could see this number increase in years to come. From conversations we have with clients, we know that many people wrongly assume that their heart condition automatically means they aren’t eligible to get any Life Insurance.
Around 80 percent of people with heart and circulatory diseases have at least one other health condition, which makes it even harder for these people to find an insurer willing to offer them Life Insurance, even with the help of their financial advisor.
Financial advisors don’t want to tell their clients they are uninsurable. This is why a growing number of financial advisor firms have an arrangement with specialist brokers like Moneysworth to handle their declined Life Insurance cases.
They care about their clients and realise they have a duty of care to help them find the insurance they need, even if that means referring the client to a specialist broker. This duty of care is the key reason why financial advisors should have contingency plans for signposting their clients to a specialist.
The financial advisors who come to us rely on our specialist expertise. Our careful research not only helps to ensure their client has the best chance of being offered cover, but quite often results in that cover being offered at a surprisingly affordable price.
Most important of all, our comprehensive approach also means the client can feel that the insurance cover they’ve purchased is fit for purpose so that – if the worst happens – the policy will pay out.
A financial advisor firm recently approached us having tried, unsuccessfully, to find Life Cover for their client who has a heart condition.
The client is a male in his early forties who was diagnosed with Cardiomyopathy over ten years ago. Cardiomyopathy is a disease of the heart muscle which affects its size, shape and structure.
At this time, he was also fitted with an ICD (Implantable Cardioverter Defibrillator) – a life-saving device which is surgically implanted inside a patient’s chest if their cardiologist believes there is a real risk that the heart could suddenly stop beating. An ICD is a defibrillator that automatically detects if the heart stops and immediately shocks the heart to start it beating again.
The client has annual medical reviews and, despite the seriousness of his heart condition, he has no symptoms whatsoever.
We were not surprised that the client and his financial advisor had experienced difficulty in finding an insurer willing to offer cover. We knew that the majority of Life Insurance companies will decline an application where an ICD had been fitted – especially given the underlying heart condition diagnosed at such a relatively young age.
When we completed our research for this case, virtually all insurers in the marketplace confirmed they would decline an application for Life Insurance. But because we were thorough, we found two insurance companies willing to give further consideration to an application, subject to seeing a GP report.
With the client’s permission, these two insurers obtained a GP report including a letter from the cardiologist.
One of these insurers then declined the application, but the other offered mortgage term assurance with no exclusions and for the full sum the client needed (over £200,000) for the whole term of the mortgage (over 20 years) for less than £100 per month.
A satisfying result for us, for the financial advisor and for their client!
1. Figures obtained from British Heart Foundation’s “Heart Statistics” publication, 2018: https://www.bhf.org.uk/what-we-do/our-research/heart-statistics
Here at Moneysworth, we’re big fans of signposting. What do we mean by that?
For an insurance provider, it’s about considering consumers’ needs – even if that insurer cannot accommodate the special needs that an increasing number of consumers have.
For example, what happens when a consumer is shopping around for life insurance and they are refused cover because they have a health condition which makes them a higher risk for insurance? This can, often incorrectly, cause consumers to think that they’re uninsurable and to give up looking for cover.
Consumers with health conditions rely on charities for information and guidance to help them overcome the complexities they face, including the difficulties of searching for suitable insurance cover.
The British Heart Foundation (BHF) is the UK’s leading charity for funding research into heart and circulatory diseases and their risk factors. For several years, Moneysworth and other specialist brokers have been listed  on the BHF’s website or in its guidance publications. We don’t always know how people find us, but we do know from our conversations with clients that many people come to us after contacting the British Heart Foundation. This is signposting in action!
The review shown at the top of this article was written by a male client in his late twenties who was determined to protect his family’s financial future.
The problem was that, because of his heart condition, he couldn’t find an insurer who would offer him Life Cover. Soon after being born, he’d been diagnosed with a bicuspid aortic valve and coarctation of the aorta. When he was a teenager, he had open heart surgery, followed by a week in hospital and six months recuperation before returning to school.
Ever since then, he’s had annual checks at a hospital, but has no symptoms and doesn’t even need to take medication. He has no other health issues and no family history of heart defects or heart disease. He is able to work in a physical role and has an active lifestyle. Indeed, the reason he has a mortgage is because he has a steady job and income!
Yet every insurer he contacted declined to offer him Life Cover because of his medical history of having a rare heart condition.
After years of unsuccessfully searching for an insurer who would offer him suitable cover, he was signposted to Moneysworth via the British Heart Foundation.
With our specialist knowledge of the insurance market, combined with our medical knowledge, we were able to help the client find the cover he needed to protect his family’s financial future. He successfully applied for and started a Decreasing Life Insurance policy for almost £400,000 to cover a repayment mortgage over 35 years, for just under £50 per month.
Thanks to the British Heart Foundation making the effort to provide appropriate guidance and signposting, many people with heart conditions are able to find Life Cover after they’ve been declined by mainstream insurers.
This February is National Heart Month, a time for each of us to reflect on how we can improve the health of our heart. Living with a heart condition can affect not only the individual but their loved ones too.
Having a heart condition has become one of the most common medical problems among clients who ask us to help them find Life Cover.
Source: British Heart Foundation statistics
Finding Life Insurance that suits your needs can be much harder if you’ve had a heart attack, a cardiac arrest or are living with a heart condition. Moneysworth specialise in helping people find Life Cover even if they have a health condition or have been refused life cover elsewhere.
The most common heart condition we see in our work is a previous heart attack (also known as myocardial infarction). However, over the last seven months, we’ve helped over ninety people with a wide variety of other heart conditions to find life cover. Many of these clients have now successfully started their policy or are currently in the process of applying for cover.
Over the next few weeks, we’re going to post a series of articles about the circumstances behind some of our clients’ search for life cover: why they needed life insurance, the problems they’d previously encountered when trying to apply for cover elsewhere, and the policy options and prices we were able to obtain for them.
It may surprise you to see how people who are living with a serious heart condition – or even multiple conditions – are still able to find cover, thanks to our team’s expert guidance and assistance.
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.
……..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.