Will Your Family Be Financially Secure If You Get Sick

December 11th, 2009

Summary
Life Assurance, Critical Illness and Permanent Health Insurance should all be thought about by people who have a wife/husband or children or anyone dependant on them for financial security.  Read this article to find out what is relevant and available.

It is awful but a certainty that 1 in 3 of us will endure some form of cancer before the age of 65. Claire Downs,a manager at Fiona Price & Partners, a firm of Independent Financial Advisors, says “”This is why protection insurance is vital, as these are not great odds”.

Life Insurance is the most popular insurance taken out, though it is questionable as to whether it is the most necessary.  Life Assurance is imperative if you have a spouse or children but not if you are alone as it pays out after you die.  Lots of people think that they can’t afford take out Life Cover but the truth of the matter is that they can’t afford not to have if they have dependants to support and protect.  P.P Coles a firm of Financial Advisors reveals in a current study that twenty four per cent of people with children don’t know if they have Life Insurance or not and 20% don’t have it.

Many business packages include life cover but they are by and large not enough to grant an income for a husband or wife with family and pay the mortgage off.  A general guideline is to insure yourself for 15 times your annual income.

Virgin Money’s research has revealed that during the last thirteen years the average cost of Life Insurance has dropped 44% purely because people seem to be living longer due to some extent to medical improvements enabling sick people to get better from illness that, at one time, they would in all probability have died from. Folks who already have life insurance cover are possibly not conscious of this element and will not gain anything unless a claim is made, so shouldn’t feel that they have to stay with their existing policy holder – there may well be much better deals around now.

On the other hand, Permanent Health Insurance and Critical Illness Insurance premiums are on the increase because people are surviving serious illness and are making a claim on the insurance.  These types of insurances are extremely vital and must be accounted for especially if if there are no dependants. The question that you have to ask yourself is can I afford not to have an income?  For the majority  of us the response is “no” and everyone should have income protection insurance.

Income Protection Insurance pays outa tax-free income which is worked out on a percentage of your salary for ‘non-critical’ and critical illness and for the complete length of time that you are unable to work.

Critical Illness Insurance Cover, should you unfortunately become terminally ill will settle a tax-free lump sum, which can help to lighten money worries or provide for any adaptations that may be needed if your mobility was to be affected. Statutory sick pay (SSP)doesn’t pay out anything like enough to help with  the financial impact that severe illness can bring about.

The Insurance Company evaluates a payment on your risk profile.  If you have a family history of sserious illness or drink heavily or you smoke your premium will be higher.  Premiums are measured on the individual person but if one or more of your family have been seriously ill, particularly under the age of 48, this could raise your payments by 45 per cent.

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Cancer Suffers and Life Cover

November 30th, 2009

Five years ago when Richard Simmons was informed that he had cancer of the brain, life was never going to be the same again but following a life-saving operation his recuperation has been excellect. However, Richard lives with the knowledge that the tumour could attack again at any time in the next ten years. He will also have to take pills to reduce his epilepsy for life.

Richard, who is now 43, believes he is the “luckiest man alive” to be still living. However he can no longer obtain life cover.

Richard and his wife have a 2 year old son, Roland, and the previous year they moved from London to Holmes Chapel in Cheshire. The family remortgaged 90,000 pounds with the Halifax but James was unable to protect the debt with mortgage life insurance of his own.

“The Nation Wide’s underwriters refused to give me life insurance cover. Sandra has critical illness and life insurance cover for the whole mortgage,” he says.

The odds of getting life life assurance cover are notably unlikely if a request is placed during the first 2 years of succumbing to a dangerous form of cancer or having had a heart attack. If the person makes a complete recovery within a given period, usually between three to five years, insurance companies will consider covering them again but put a “loading” on to the monthly payment. In some instances this may be as large as 6 times the premium that others pay.

During the first 5 years after an operation, someboby in Richard’s circumstances would be refused cover. Following this stage, life cover should be obtainable “but at a very high monthly payment”.

The life company which underwrites for high-risk people (those who practice hazardous sports or with serious medical problems is the Special Risks Services. It maintains to have a achievement rate of seventy five per cent when putting its customers with insurance companies. Insurance Centre Special Risks confirmed that it would be at least another year before they could think about an application from Richard.

Payments will unavoidably be heavy because of his epilepsy and compared to the general population there would still be an increased mortality risk. Unless an insurance cover purposely excluded cancers, Richard would certainly be refused any critical illness insurance cover.

Therefore as a result of professional financial advice, Richard’s family has saved up six months’ emergency money, effectively a self-insurance policy.

And there is some good news for Peter. Chelten and Gloucester, his previous mortgage company, has permitted him to keep sixty thousand pounds of life life insurance cover from an existing policy – although at a price of fifty pound a month. The name for this kind of policy is Guaranteed Insurability Option and means the insurers will allow the insured up to 1/2 of the initial amount assured without underwriting.

It is not only critical medical conditions that can influence  life cover. Edward Jennings, media and marketing manager of Sale Sharks Sports Club had his first application declined because of a minor skin complaint. Frequent trips to consultants and no end of telephone calls to Scot Prov they in due course sorted things out. Mr Meer’s counsel to anyone in the position is to make an application early and collaborate it with a complete medical report.

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The Doctors News Is Bad; Insurers could Make it Worse

November 13th, 2009

Summary
Thesystem in which the seriousness of an illness can affect the pay out. How insurance companies are constructing new plans which offer partial pay outs.

Hearing that you have got  cancer is shattering news. At some stage inour lives, one in 3 of the population will become infected with the disease. It is not unexpected that PPP realised that of all diseases, cancer gives Britons intense apprehension.

At this trying time you would be expecting an instant pay out by your health insurers, enabling you to concentrate on getting better. Alas you could be given a big shock. Lots of cancer patients make a full recovery with thanks to developments in medical science. Nowadays some cases are not looked upon  as severe, so it is alarming to discover that most medical and online life insurance plans only pay up when your condition is life threatening or terminal.

An independent financial adviser, warns that people must not assume that they will get a pay out just because they have been diagnosed with a severe illness. He advises people not to concentrate on the cost alone when taking out the cheapest life cover, but to study the small print in a private medical or critical illness plan to certify that the insurance company will pay you when you really need it.

On the diagnosis of a specific condition, critical illness cover will settle a lump sum. However, you will receive better quality and rapidity of treatment with private medical/health insurance. For example, suitable licensed drugs maybe available, which are not dispensed on the NHS. A spokesperson of independent advice firm Direct Life and Pensions says about 15 per cent of claims do not succeed on protection policies and at settle for serious illnesses and diseases. On the other hand some cancers sound much more severe than they are and in these situations you more than likely won’t receive any money from traditional plans.

In the past insurers had an all or nothing approach, but they are now starting to supply life assurance policies with a complete or part pay out. An example is PruProtect, an alternative critical illness policy from the Prudential, which relates the size of the pay out to the severity of the illness and how much anguish it will cause. This policy does not become null and void once a demand is made but following pay outs may be decreased significantly. This figure is specifically important when the patient is diagnosed with a stage-one or stage-two cancer, which could become even more severe.

Just lately the insurance industry addressed the vexed issue of customer non-disclosure. The ABI has brokered a new contract, which will permit claims effected by non-disclosure to get a full or partial pay out, which was not the case previously.

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An H Bomb For insurers Due To Genetic Testing

October 20th, 2009

Summary
The problems linked to the launch of genetic testing and how it will be used in the writing of insurance policies, especially in association with HD.

Insurance covers might not be influenced at the moment by the controversial issue of genetic testing following the Association of British Insurers suggestions that customers should not be asked by insurance companies for the results of genetic tests for the next five years.

Like many of ABI ‘s announcements,  such as erasing the Raising Standards Initiative, it is not an obligatory code but a voluntary one.

Nonetheless it is great news. In practise, very few of  Association of British Insurers 390 insurers are expected to ignore the suggestions, as it might put their membership of the Associationat risk. The low consistrency of genetic tests offered at the moment was acknowledged by the Association of British Insurers. For example, merely because a member of their family died from cancer does not always mean that they will suffer from the disease. Nevertheless the still supports the test for Huntington’s disease as a reliable guide when underwriting life cover quotes.

On life policies over 500,000 pounds, insurance companies may demand the results or a genetic test for Huntington’s Disease. On the other hand ABI states that only 4 per cent of all life insurance covers are underwritten for over 400,000 pounds.

A Parliamentary select committee has expressed scepticism about the effect of the genetic testing for HD and has demanded that the GAIC reassesses their decision. It is crucial that this amnesty is used to discuss the matter in depth rather than to make it  a pretext to disregard genetic testing for the nextsix years. Being an ostrich will just worsen the situation, as developments in medical science will be employed to cultivate much more trustworthy genetic tests within the next six years.

Insurance companies may then make use of genetic tests when underwriting covers, leaving people with a genetic lower class, who have a problem finding life assurance. Many Life insurance policy companies like the Friends Provident, are proposing a public/private resolution to resolve the problem. They most recently employed an all encompassing moratorium on the underwriting of life insurance cover built upon the results of genetic tests. The use of these tests will be expensive so it is only reasonable that the Government should take their share of the burden with insurers.

An impartial complaints system will be established by the ABI so that the public have ample rights if they consider that the insurance companies have handled them unfairly. At present there isn’t any facts of how a scheme of this type would work, nevertheless it needs to give answers, which purely deliver and be completely independent of the insurance industry. The ABI will police the moratorium themselves, which raises worries about whether the public will obtain a fair  hearing. The encouraging statement by the Association of British Insurers will be an empty promise if they do not.

The House of Commons Cross Party Group have been presented with a Joint Statement of Concern  46 individuals and organisations have requested Parliament to promulgate a law to avert  the use of genetic test results for insurance.

They are worried that there is no legal framework to prevent the use of genetic testing by employers and insurance companies to make judgments about who gets the cheapest life cover insurance. Moreover they consider that testing is not a conclusive or reliable predictorof a clients future medical health.

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Insurers Take Steps To Improve Protection Insurance

September 3rd, 2009

Summary
This article describes how Protection Insurance may possibly turn out to be more popular
with the insurance market at last making positive steps that could with any luck be successful.

A lot of trained  financial advisors would agreethat Protection Insurance is necessary  to a good number of families, either as a  safeguard in the event of prolonged illness, premature death, cover for an accident or loss of employment (especially in the present economic climate).

Life Insurance Cover is the basis of all financial assurance for cover for a mortgage or to ensure a lump sum that is not taxable, in the eventuality of death.  Sadly, a proportion of other Financial Protection Insurance policies, do not do not have similar reliable qualities and have been labelled as being miss-sold.  Also, based on what we are now aware, critical illness insurance has suffered as a result of astonishing exclusions from insurance policies making it possible for insurance companies to reject a claim even if it is genuine.

In spite of this, a little faith was reinstated when  Legal and General gave details on the conclusion of claims ( involving cancer and other illness’s ) on Critical Illness policies on their half yearly statistics. 

Critical Illness Insurance claims were being refused because customers did not make known their full medical background.  As a result Standard Life insurance  reports that in the last six months the number of declined claims has plunged significantly from 6.7 per cent in the last year, to 1.5 per cent.

Why?  We believe, not only Aviva but all of the insurers, because of destructive publicity, have been placed in a position whereby they must reduce the amount of claims that are rejected. Does this show how strong the media can be?  Debateable perhaps – you may think we are dubious but we believe there are other issues that encouraged the insurance companies to make changes.  A short time ago, as a result of bad press, sales of Critical Illness Insurance policies  have dropped which in turn has noticeably impinged on the cheap life insurance company’s profit. This is more likely to have been the catalyst to promote change!

Scottish Provident, Friends Provident, Axa and Norwich Union have instigated some important changes expressly created to reduce their rejection rates. To start with, they silhouette plainly that all health disclosure, however trivial a visit to a Doctor might have been, must be includedmade known.  Axa, amongst others will get a Doctor or Nurse to phone every applicant to discuss all the details of their medical record.  If the insurance policy then goes on risk, some policyholders are being reminded that it is important that they provide complete medical disclosure and they are allowed to add or put right any details on their application.

The insurer may then reconsider the risk and if it is believed to be increased the monthly payments will most likely be increased – which looks more reasonable and ultimately more satisfactory than paying the original premium then having a claim rejected owing to non-disclosure of medical information.

This action should have been taken by the insurers years ago as the public’s understanding of Protection Insurance has  deteriorated by their somewhat strange approach. Without doubt, there is a clear and necessary need for protection insurance so we can hope that it is able to re-establish trust and then the popularity it duly deserves.

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Drinking, Smoking Or Ill-health Can Increase Your Life Insurance Premuims

August 19th, 2009

If you have a family history of poor health or if you drink excessivelyor are a heavy smoker you might be under the illusion that critical illness cover or life insurance cover may be very very expensive. A director at Royal London, Mr T, says this isn’t alwaysthe case, “Quite a lotof thoseeating ‘too much’,excessive drinking or heavy smoking may wellstep back away from protection for fear of being incorrectly penalised for their appallinghabits. However, they will most likely find that these essentialforms of financial protection cost far less than they think.”
Mr L a specialist re-insurer, says only 25 per cent of the working community have life insurance cover and only twenty  per cent haveCIC, even though it is generally deemed that if you are employed and/or have dependants and a mortgage, this  assurance is crucial. Lots of people are taking dangerous risks.
If a person were to die suddenly their life insurance policy will pay out on death and with a bit of luck will be enough to repay the outstanding mortgage, and/or provide any family with financial security.  In the case of critical illness coverit pays out a dividend and helps at this time.  Even though medicine is improving all the time and people are getting better from life-threatening illness, they are generally unable to work periodically or are forced  to give up completely; this is when a tax-free lump sum can create the financial security desired.
If a person does drink or smoke insurance premuims will be higher but they do vary considerably between one insurer and another. And  they also vary between critical illness cover and life insurance. Scottish Mutual doesn’t raise premiums until a person is drinking the equivalent of four to five pints daily.  For a non-smoking 34year old, drinking less than 9 units per day or 45 units a week, for 120,000 pounds of life cover, the basic rate is 18.10 pounds per month.  If you drink between 50 and 65 units weekly it increases to 26 pounds per month.
In comparison, it will cost a 26 yr old non-smoker 18.90 pounds per month for 100,000 pounds of CIC . For a smoker this increases to 32.60 pounds monthly, but the premium only rises again if you smoke over 40 a day.
**A family history of conditions such diabetes or heart disease does not mean that premiums will be significantly higher.  A 36 year old psychiatrist, Mr Y, comes from a family that has a lot of members suffering from diabetes although his sister and his parents do not. A few months ago, he and his wife took out life insurance and CIC with Axa from  Scottish Equitable Protect, giving them a cover of 145,000 pounds.  Their monthly insurance premium costs 37.50 pounds and Mr L was quite surprised that his families medical history didn’t influence what they pay.
A manager of Money Supermarket, Mr O, says if you can’t afford to do both together, it is sensible to protect your mortgage with life insurance and then take as much critical illness cover as is affordable.
“Everyone who can afford it should have critical illness cover,” he says. “If you’ve got children you should have life insurance and critical illness cover. The only people who may not  critical illness are those with extremely good, not just normal, employee benefits.”

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August 19th, 2009

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