For a long time the provision of critical illness cover in the UK for diabetics has been extremely limited. Where critical illness cover has been available it has come with significant exclusions for cardio vascular risks, the very critical illnesses that would be of most interest to those with diabetes.
The good news is that significant changes are taking place which mean that for some diabetics we are now able to arrange critical illness cover without any exclusions. As specialists in the proctection market for people with health conditions welcome this excellent new development which we believe will be of real benefit to many diabetics. Diabetics wishing to make enquiries should visit http://www.moneysworth.co.uk/ or call 0845 430 5200
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.
‘There’s nothing worse than an ex-smoker’ it’s said so I’ll start by fessing up to a previous habit. My purpose is not to moralise on the subject (we all make our own choices anyway), I simply want to look at how insurance companies currently view smoking and diabetes. Also just before I get going I should point out that we at Moneysworth help both smoking and non smoking diabetics to obtain life cover, day in day out.
It may seem a bit obvious but we and the life companies all know, as it says on our the packets, that smoking is bad for our health. As mentioned in previous blogs not only do life companies charge significantly higher premiums for smoking, the price differential has been increasing over the years too.
So what about diabetes and smoking? Well did you know that some life companies not only charge extra for both being diabetic and for smoking but also make a further third charge for smoking AND having diabetes? We also know of one major insurance company who automatically decline all type 1 diabetic smokers, regardless of how good the rest of their profile.
So why the nervousness? It’s all to do with cardio vascular risks. Diabetics are at increased risk of cardio vascular events and of course unfortunately diabetes is a progessive illness. Doctors are therefore keen to identify and manage key cardio vascular risk factors in their diabetic patients. Key factors include BMI and a family history of early diagnosis of heart conditions. Many diabetics take statins and in a significant amount of cases this is not due to the patient having a cholesterol problem, but to make sure that they don’t develop one in the future, as this would again provide an additional cardio vascular risk. Blood pressure is another key factor.
Perhaps to some readers the risk of cardio vascular complications for the diabetic does not seem too important or immediate. I would urge such readers to think again. Firstly and most obviously a lot of people do die of heart attacks – and for these the warning signs often come too late ornot at all. Secondly for those diabetics who do manage to survive a heart attack or who are diagnosed with angina for example, the chances of obtaining new life cover currently reduce to nil with all the major UK life companies. I will return to this issue in a later blog.
In the meantime what can smoking diabetics expect when applying for life cover? The truth is that many of them can expect to be declined by a lot of companies. You will save yourself a lot of time and heartache if you use the services of a broker who really specialises in health conditions.
The significance of smoking for Type 2 sufferers who apply for life cover will depend upon the number and seriousness of other additional (especially cardio vascular) risk factors present as well as the level of smoking. At the very least the premiums will be significantly more expensive and at worst the applicant might struggle to get any life cover at all.
For Type 1 sufferers smoking is even worse and applications are even more likely to end in declinature. The reason why is as follows. Type 1 sufferers tend to have already been living with diabetes for a lot longer than the average Type 2 sufferer who is seeking life cover. This means that they generally start at higher rating bands to begin with. This also means that there is less room for the insurance companies to play with in terms of adding extra amounts of ratings for extra complications, before the cases turn into a ‘decline’. It is still possible for some type 1 diabetic smokers to obtain life cover but its more difficult than for type 2 diabetics.
The news for diabetics who are able to give up smoking for at least 12 months is generally more positive as they can still be treated as non smokers by the life companies. Stopping smoking is likely to result in a more favourable attidue from life companies and cheaper premiums.
So in summary our advice for smoking diabetics is
1) Do seriously consider giving up smoking if at all possible, most importantly it will improve your health in the long term and save you a lot of money.
2) When you give up smoking for 12 months do expect life assurance companies to seek to verify this by way of a cotinine test.
3) Don’t however delay purchasing life cover in the meantime. Waiting until you have stopped smoking for 12 months before applying for life cover may leave your family with little or no protection and the prospect of losing the family home. Its better to find cover now and protect your family even if you apply for a lesser am,ount of cover than you would ideally like. Most people will still stand a good chance of benefitting from reduced premiums when you have stopped smoking for 12 months anyway.
4) Use a specialist broker rather than trying to arrnage the life cover yourself – its quicker and you are likely to get a better result. But make sure the broker really is specialist in arranging life cover for diabetics first.
5) If you think it is unlikely that you will choose to stop smoking in the foreseeable future, then work on the basis that it will become more difficult and more expensive to obtain life cover in the future. Get covered now and keep hold of it!
A client recently came to us with a difficult case – subaortic stenosis.
At Moneysworth we do our best to help everyone who comes to us with a health condition to obtain life cover. We deal with a lot of heart related medical conditions, especially heart attacks, angina and heart by passes. However there are of course a number of other heart conditions, including subaortic stenosis.
Like so many who come to us this client was seeking life insurance to cover his mortgage so that the remaining mortgage debt would be cleared in the event of his death, thereby providing him and his family with peace of mind knowing that should the worst happen the family would still have thier home. In this case our client was therefore seeking approximately £150,000 life cover for a 25 year repayment mortgage.
So what made this case difficult? Unfortunately for him, our client was diagnosed in early childhood with his heart condition. Later on in his childhood our client had a surgical proceedure, which could be argued to have been mostly a success, though some some slight leakage was detected for a while after the operation. Over time the leakage appeared to stop and the client now lives a normal life.
We approached a number of insurance companies on behalf of our client who were generally reluctant to agree to provide life insurance. There were no other significant health conditions in this case and clearly most life companies remained nervous about the key underlying health condition – subaortic stenosis. Despite most life companies declining to offer the life insurance we persisted with our search. We know from experience that it does not always follow that every life company will view the same information in the same way and sometimes we have to pass by a number of closed doors before we find one that is open.
Which is exactly what happened in this case. We managed to find a life company who were willing to look at the case differently. After obtaining detailed medical information they were able to view the outcome of the operation more favourably. Whilst they wished to charge a small additional amount to reflect some additional risk, they did not regard the additional health risk factors to be significant enough to warrant declining our client’s application.
So the hard work and patience payed off and in the end we were able to acheive a very positive outcome for our client. Not only were we able to find the total amount of cover that our client was seeking, but we were able to do so at a very attractive premium of less than £17pm.
What a great result!
There is a great new way to arrange life insurance in the UK which can open the door to significant savings and as we know every little bit helps at the moment. Under the new arrangements, for those who qualify, it can be possible to get the new life cover treated as a legitimate business expense.
So what are the possible savings? Firstly because your company will be paying the premiums and because they are an allowable business expense there is the potential for the company to obtain corporation tax relief. Secondly there is no Employer’s National Insurance due.
The first area of employee savings is a big one, Income Tax. A relevant life policy does not count as a benefit in kind, therefore if the company pays the premium there is no Income Tax to be paid by the employee in respect of the life cover contributions. Secondly the life company premiums do not give rise to Employee’s National Insurance.
This is good news for employers and employees alike and probably best news of all for those company directors who are both employer and employee at the same time.
For example the real gross cost up to now of a £200pm life cover premium to a 40% taxpayer after accounting for tax and employees and employee’s NI is a whopping £392.41pm which, after corporation tax relief nets down to £317.41pm.
Compare the above with setting up the same cover as a relevant life policy. The amount payable to the life company remains the same at £200pm, but this time there is no Income Tax or National Insurance contributions to add. After paying the premium the company claims corporation tax relief, which at 19% reduces the net cost to £162.00pm
By setting up the life insurance as a relevant life policy the total saving achieved for employee and company is 49%. All you need is a willing employer.
Its also worth mentioning one other group of people who stand to particularly benefit from relevant life policies and that is those who are close to the personal lifetime allowance limit. Traditional death in service scheme benefits are taken into account when calculating whether the personal lifetime allowance has been exceeded but relevant life policies are not included.
As usual there are a number of rules which need to be followed when setting up a relevant life policy. First of all relevant life policies are not available for the self employed, so if you are a sole trader or in a partnership you will not be allowed to have a relevant life policy (unless you also have non self employed earnings). Secondly the benefits of the life policy must be ‘reasonable’ in relation to the life assured’s income. Whilst this probably leaves room for the amount of cover to significantly exceed the ‘four times salary’ traditional death in service scheme maximum, which is another plus point, the amount of cover must still be ‘reasonable’. Also although income can include dividend income, it must not soley consist of dividend income (ie there must be some PAYE earnings).
Other key points to watch out for include a maximum age at the end of the policy of 75 and the plan must only provide life cover (no other benefits).
The policies have to be proposed by the limited company (the employer) on the life of the employee and written under trust for the life assured’s beneficiaries. Should one’s employment cease then the employer will have to cease paying premiums and cover will need to stop, unless (as would usually be preferable) the life assured takes over paying the premiums themselves.
Finally a couple of tips.
First if you are thinking about replacing life cover that you already hold with a relevant life policy, don’t stop your existing cover until you are in receipt of full acceptance terms from the new life insurer – the worst possible mistake would be to cancel existing cover that you already hold in anticipation of arranging more tax efficient cover only to find that the new insurer wont accept your application due to a health problem etc!
Secondly, at this moment the majority of life companies have yet to wake up to the potential cost savings that these policies offer so you’ll have to look around to find which companies are offering these policies or dare I say come to a company like Moneysworth who already know and can arrange the whole thing for you.