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Health insurance update – new health insurance partners

Health insurance news

We’re proud to announce that we’re extending our health insurance panel to offer more choice and better cover to our customers. We now offer a comprehensive range of health insurance products from the UK’s biggest and best providers.

Health insurance is now more important than ever due to the recent issues faced by the NHS in England, Scotland and Wales. The demand for quality health insurance has increased as people become more aware of the need for cover.

Here’s some information about health insurance or private medical insurance (PMI) to help explain why you might want to consider cover.

Our health insurance partners

We’re delighted to welcome some of the UK’s top health insurance companies to our panel of insurers. Our health insurance partners include:

  • AXA PPP
  • Aviva
  • BUPA
  • The Exeter
  • Vitality Health

Why do I need health insurance?

As a result of the recent strain added to the NHS from Coronavirus, it’s more important than ever to get the right level of care. If you are ill or you need treatment then you might not get access to care as quickly as you need.

Health insurance makes sure that you get access to the best care from private doctors and specialists.

You also avoid long NHS waiting times which can be costly be personally and to your health.

What is health insurance?

Health insurance is a type of insurance policy which provides cover for the cost of private healthcare. The policy works in the same way as most types of insurance, you pay a monthly or annual premium, and your insurer (provider) pays out for a claim. In this case, a claim would be the cost of some or all of your private medical treatment.

A health insurance policy can be taken out as either a single policy for you, or joint policy to cover you and your partner. It can be easier and more cost effective to take out a joint policy, this means you’ll also only have one policy and one insurer to deal with.

What are the reasons for taking out health insurance?

Waiting times

Currently the waiting times for treatment on the NHS are increasing which can be extremely costly for your health. The longer you are made to wait for treatment, the higher the risk of longer lasting damage to your health

Treatment

Health insurance provides a far greater amount of treatment options and a wider choice for you and your family. There can be treatments that are available through your health insurance provider which aren’t available on the NHS

Comfort

As a health insurance customer, you’ll be treated in private hospitals which will offer a higher standard of facilities. This can include your own personal room with extremely comfortable surroundings

What does health insurance cover me for?

We offer a range of levels of health cover which can include a number of different options, depending on what you need. We can also create a package for you and your family which is more affordable

Bronze

A bronze health insurance package will include inpatient cover which will pay for treatment during hospital inpatient care

Silver

Will include inpatient (bronze) treatment as well as generally providing cover for outpatient care as well

Gold

This is a more comprehensive level of cover which would provide inpatient and outpatient cover, as well as full therapies cover and other types of specialist treatments (e.g. mental health, dental care and physiotherapy)

Are you interested in getting a quote for health insurance?

If you’re unsure and just want to know more then you can speak to one of our team of health insurance experts. You can contact iam|INSURED free on 0800 009 6559 or complete our enquiry form

Your questions: Does life insurance pay out for suicide?

Does life insurance pay out for suicide?

Most people would not usually think to find out whether their life insurance policy pays out for suicide. The fact is that almost all standard life insurance policies will pay out for claims form suicide after an initial qualifying period.

Here we look at what the rules are around claims for suicide from a life insurance policy in the UK. Even though this is an incredibly difficult subject to discuss for most, unfortunately it is a valid question.

We’ll consider which insurers will pay out for suicidal death and what the clauses are.

What is a suicidal death clause and how does it work?

The majority of life insurance policies in the UK will be written with a suicidal death clause. This clause sets out the terms and conditions for payment of a claim from suicide and how the cover would apply to your policy.

What does a suicidal death clause do?

A suicidal death clause typically relates to a time period from the start date of the policy (inception). This time period is where a claim would not be paid in the event of suicidal death.

How long would I not be covered for under a suicidal death clause?

The majority of suicidal death clauses will last for a period of 12 months from the start date of a policy currently, however some are 24 months. This time period is subject to change and may vary from one insurer to another.

Will my life cover pay out for suicidal death after the exclusion period?

The short answer is, yes. After the initial exclusion period of 12 or 24 months, you’ll be fully covered under most life insurance policies in the UK. If a claim is raised for suicide then the insurer may ask for medical evidence or a hospital report.

The main reason for a claim being declined is ‘non-disclosure’ so make sure that you tell your insurer everything about your health when you apply. You may be asked some quite personal and difficult questions, this isn’t unusual and just be as honest as you can.

What are the main life insurance providers in the UK that cover suicide?

Below is a table of the Top 10 insurers that pay out for suicide and the terms of the suicide clause:

Insurance provider Suicide cover Initial period for when suicide is not covered
Aegon Yes 12 months from the policy start date
AIG Yes 24 months from the policy start date
Aviva Yes 12 months from the policy start date
Beagle Street Yes 12 months from the policy start date
Legal & General Yes 12 months from the policy start date
LV= Yes 12 months from the policy start date
Royal London Yes 12 months from the policy start date
Scottish Widows Yes 12 months from the policy start date
Vitality Yes 12 months from the policy start date
Zurich Yes 12 months from the policy start date

 

Can I get life insurance if I suffer with a mental disorder?

Life insurance applications have changed dramatically over the past several years for mental health. Modern versions of the life insurance application form will ask a set of standard questions about mental health, suicide and/or self-harm.

This is mainly due to the number of claims that have been paid in recent years due to suicide, and the prevalence of mental health.

You might be asked a number of questions about your mental health and to provide information about any personal issues. We appreciate that this can be incredibly difficult for people to answer in some situations but it’s important to let your insurer know about it.

What questions will I be asked about my mental health?

When you speak to one of our advisers, you’ll be asked questions about mental health, self-harm and suicide.

Some of the questions might be:

  • Have you ever harmed yourself or thought about harming yourself
  • What type of mental disorder you suffer from
  • Have you ever been referred to a specialist or admitted to hospital
  • What type of medication / treatment do you receive
  • When were you diagnosed with the mental disorder

Is it possible to get life insurance if I’ve attempted suicide or harmed myself?

It may be possible in a lot of cases to get life cover if you’ve previously attempted suicide or self-harmed. There are some insurers who are more sympathetic than others to people who’ve had previous more severe problems connected to mental health.

There are a number of potential things to consider if you’ve had severe mental health symptoms or issues. It’s often better to speak to an expert like iam|INSURED, who can guide you better because:

  • Advisers who understand your needs and circumstances
  • Able to find the fairest price and the best cover
  • Be sympathetic to your needs
  • Know which insurers are best for your situation / history

What if I’ve been declined cover in the past because of mental health?

It is possible that you might have previously applied for life cover, but were declined because of your mental health. It’s also very possible that a specialist or expert such as iam|INSURED can still get cover for you.

Also there are a number of reasons why cover may now be available where it wasn’t previously:

  • Change in underwriting
  • Applied to the wrong insurer
  • Improvements in your health
  • Time has passed since your last application

If you need advice or help with life insurance and have mental health issues then you can contact iam|INSURED on 0800 009 6559

High BMI and Overweight life insurance during COVID-19

High BMI and Overweight life insurance during COVID-19

One of the most commonly linked health problems with higher risks of serious illness from COVID-19, is high BMI and Obesity. There has been several major studies which have shown that people with a BMI of over 35 are 40% higher risk of death due from COVID.

There are currently some issues with life insurance underwriting in the UK and globally due to the current pandemic. Most insurance providers in the UK have restricted there limits so are currently only offering cover up to certain levels.

At iam|INSURED, we’re experts in helping people with medical conditions and health issues to get life insurance at a fair price. Our team of expert advisers speak to literally thousands of people every month to help them to protect their families.

COVID-19 has caused insurance providers to impose extra underwriting restrictions which includes BMI levels. We are constantly reviewing the situation and working with our partners which includes some UK’s top insurance brands.

High BMI (body mass index) and Obesity statistics in the UK

Obesity and high BMI is one of the most common health risks in the UK which is also the most common health disclosures in life insurance.

Facts and figures:

  • 62% of the UK population is overweight
  • 58% of women and 68% of men are overweight
  • Almost a quarter (25%) of UK adults are classed as obese
  • The UK has the highest obesity rates in Europe
  • Around 30,000 deaths in the UK are weight related

What is classed as overweight or obese in the UK?

Weight classification in the UK is linked to Body Mass Index (BMI). Although this is not the most reliable method of calculating a person’s health, it does provide a good indication.

Example: A body builder or rugby player can be healthy and athletic but have a high BMI due to their muscle mass

BMI calculator:

Current BMI categorisation in the UK according to the NHS are:

  • Underweight: Below 18.5
  • Healthy weight: 18.5 to 24.9
  • Overweight: 25 to 29.9
  • Obese: 30 to 39.9

How has COVID-19 affected Obesity and High BMI life insurance?

There have been a number of studies which clearly link high BMI and obesity with serious illness or even death from COVID-19.

Previously, in life insurance in the UK, it has been possible to get cover with a BMI of over 50 from a select group of insurers.

BMI limits for life insurance before COVID-19:

  • Standard life cover: 50
  • Specialist life cover: 55

Current BMI limits for life insurance in the UK:

  • Standard life cover: 40
  • Specialist life cover: 44

What are the health risks for people who are overweight during COVID?

According to recent studies, obesity can increase the risk of death due to COVID-19 by 48%. The study which was carried out by the University of California (UNC) and the Saudi Health Council and World Bank, found that people who were obese were nearly 50% higher risk, which was “scary” a researcher said.

Another study found that people with a BMI of between 35 and 40, were 40% higher risk of death, and those with BMI’s of over 40 were 90% higher risk. This is compared to those who did not have a high BMI.

Other data sources found that 7.9% of critically ill patients with COVID-19 had a BMI over 40, which was compared to 2.9% of the rest of the population.

Medical conditions linked to High BMI and Obesity:

What’s going to happen to life insurance rates for people who are overweight?

The current situation with the pandemic is constantly being reviewed by insurers and by medical experts. We are also speaking to our insurance partners on a weekly basis to find out whether anything is going to change.

The current underwriting guidance is not likely to change for the foreseeable future until the situation with COVID changes. Some insurers are suggesting that they may relax their rules after a 2nd wave or after a vaccine has been released.

What else can I do if I can’t get life insurance currently because of my weight?

There are certain insurance products which are available through iam|INSUREDto help protect your family through this period. It’s our aim to provide some life cover to our customers where possible, regardless of their health.

Some of the other options includes:

  • Over 50’s life cover (if applicable)
  • Guaranteed acceptance life insurance
  • Personal accident (with accidental death)

It’s important to make sure that you’ve got some cover rather than nothing and a lot of these products are cheaper than standard life insurance.

If you’re confused about getting life insurance and don’t know what to do then you can contact one of our experts free on 0800 009 6559

Over 55’s turning to Equity Release due to COVID-19 financial stress

Why is Equity Release becoming more popular among over 55’s?

The equity release market has been growing steadily in popularity over the past two decades and increasingly in the past few years. The main reason is that more people are reaching retirement with equity in their properties and not enough pension income.

Even though equity release has been available for over 20 years, it’s still something that not many people know about. If you’ve never heard of the term equity release then you’re not alone and it’s something that is becoming more common in the present economic climate.

In basic terms, equity release is also known as a lifetime mortgage which is a loan secured against your home, which only needs to be repaid when you pass away, or move in to permanent care. In recent years the rates for equity release have dropped significantly, this is due to an increase in popularity and a more competitive equity release lending marketplace.

Some of the main developments which have made equity release much more popular are; negative equity guarantees, more flexibility and product options to choose from, and far lower competitive rates. Currently there are also a number of ways to take out an equity release loan to suit each borrowers needs and situation.

Equity release has also become more heavily regulated thanks to the Equity Release Council and Financial Conduct Authority (FCA). Financial advisers are also now required to hold a specific qualification to be able to advise customers about this product. This means that customers are now protected much more than they ever have been in past.

What do people use Equity Release for?

In the current difficult economic climate, many borrowers are using the funds from equity release to help their families by gifting them money. Traditionally the loans have been used for home improvements, or lifestyle choices such as a dream holiday.

Currently we’re seeing an increasing demand from customers who simply want to support their children or families. The Coronavirus pandemic has caused people to have to dramatically review their financial circumstances. Providing financial support to loved ones has been a big talking point.

Why should I consider Equity Release?

You could be able to provide financial support to your family or better fund your retirement without having to downsize or take on extra debt. A lifetime mortgage allows you to release tax-free cash from your home without added stress or expense of moving home or having to make monthly repayments.

People have also been concerned in the past about leaving their family with a debt if they pass away. The modern equity release loans mean that this is not possible and you can also secure a legacy to leave your family as part of their inheritance.

What about if I have an interest-only mortgage and I’m over 55?

There is also a growing situation where around 40% of mortgage borrowers over the age of 55 have an interest-only mortgage which is due to end before 2025, and they have no funds available to repay the debt. This equates to approximately 60,000 home owners over 55 in the UK alone.

Being able to repay that amount without moving home and downsizing has now become possible with equity release. It’s also possible to take out an equity release loan with no monthly repayments, allowing you to enjoy your retirement without the financial worry.

For more information about equity release, call our qualified expert Matthew Jones on 0800 009 6559.

The complete guide to Mental Health Conditions and life cover

How have things changed for people with mental health who want life insurance?

Author: Daniel Sharpe-Szunko

We’re often asked to find life insurance by people who suffer with mental health. We appreciate that it’s very difficult to have to share very personal information about your mental health with someone you don’t know. It’s even worse if the person that you’re speaking to doesn’t understand you.

Mental health is one of the hottest topics in the medical world today, which also applies to life insurance. It’s got to be one of the most difficult subjects because of the numerous stigmas around mental health. Another possible problem is that there are no specific symptoms for mental health so it’s difficult to assess.

What’s different about a mental health life insurance expert?

iam|INSURED is a life insurance expert dedicated to helping people with mental health issues and other medical conditions. Over the past 20 years, our team of advisers has helped thousands of people to get the protection they need for their families.

How has life insurance changed for mental health?

We think this is very important to explain, simply because of how far things have improved over the past 20 years. There’s probably a number of key points to consider when looking at how things have moved on for this, such as:

  • People in general are more aware of mental health
  • Greater understanding about mental health conditions
  • Less stigma around mental health
  • Treatments have also improved

Over the past 2 decades we’ve seen major changes in how we talk about mental health and treatment. This group of conditions covers a huge range of different types of mental health related problems, as well as being linked to many other medical conditions.

When we talk about managing a medical condition such as MS, Diabetes, Cancer or Heart Disease, it’s often linked to mental health. It seems logical that someone having to manage, monitor and maintain a medical condition, may also have to cope with Stress or Anxiety.

Previously with mental health and life insurance it was difficult to understand how that may affect you physically. It’s easier to assess someone physically than mentally simply because of the symptoms and treatments.

Do I need to speak to someone about my mental health to get life cover?

One of the most important issues that we face and our customers face, is having to discuss distressing events with us. We appreciate that it’s a very sensitive subject and that it can be extremely disturbing to have to talk about your mental health.

The fact is that in most cases to get the best advice, it’s important to disclose facts about your health. If you’ve had problems with mental health in the past then you may need to talk about that with your adviser.

Some of the questions you might be asked may include:

  • Have you suffered from Stress, Anxiety, Depression or another mental health issue?
  • Have you ever been admitted to hospital due to mental health or been treated by a psychiatrist?
  • Have you attempted to take your own life or had suicidal thoughts?
  • Have you intentionally harmed yourself or thought about harming yourself?
  • When did you first have symptoms?
  • Are you waiting for a hospital referral or to be seen by a specialist?

These are just some examples of the types of questions that you might be asked when applying for life cover. As you can see, these questions are quite personal and could be distressing to discuss.

We’ve got a team of experts who understand this and have years of experience, so this is important for us.

Continue…

Warnings over extended mortgage and credit card payment holidays

Warnings over extensions of mortgage and credit card payment holidays

Mortgage payment holidays were released by the government in March 2020 to help people who were financially impacted by COVID-19.

Since the beginning of March, around two million mortgage borrowers have taken advantage of up to three months payment breaks.

As well as this, members of the UK Finance trade association have offered 27 million interest-free overdraft buffers, provided 961,700 deferred payments on credit cards and 688,900 personal loan payments deferred.

In these cases, interest will more than likely continue to build during the deferred period or payment holiday, unless specified by the lender. Customers should carefully consider their options before accepting any such scheme and especially for further deferment.

On average, the payment deferral equates to £755 per month which is the amount of the suspended payment.

It is also suggested by UK Finance that 1 in 6 mortgages has been or is now subject to a payment holiday. This equates to over 1.9 million mortgage payment breaks.

As many borrowers now come to the end of the initial 3 month payment holiday period, lenders will be contacting them to make sure that they are still supported. Mortgage borrowers may now be offered further options which will include:

  • Continued full or partial payment holidays
  • Switch to interest-only temporarily
  • Extend mortgage terms to reduce payments

It has been suggested that mortgage lenders are now able to offer further mortgage payment holidays until the end of October. The reason for the extended payment periods is to assist those still experiencing financial difficulties, such as those still on furlough.

Our advice to people who are considering extending their mortgage payment holiday, is to be very careful. These options have been put in place to assist people who really need it and not to simply ease the pressure for a few months.

Lenders are expected to be more rigorous with their checks on the extended payment holidays. Some will be offering debt counselling as well as other possible alternatives before accepting an application to extend.

You should also be aware that even though your credit rating will not be impacted, your options for future borrowing could reduce. Some lenders are taking a dim view on borrowers who have taken advantage of payment holidays for further borrowing or new mortgage applications.

If you want to know more about mortgages then you can contact our team of qualified iam|MORTGAGES experts on 01244 732899 or visit www.iammortgages.com.

Love Your Lungs Week – how does COVID-19 affect our lungs

Love Your Lungs Week 2020

Author: Daniel Sharpe-Szunko

Today marks the beginning of National ‘Love Your Lungs Week’ from the British Lung Foundation. This year it’s more relevant than ever due to the increased risks for people with lung conditions due to COVID-19.

If you suffer from a lung condition and you need help, you could visit https://www.blf.org.uk/take-action/campaign/loveyourlungsweek for more information.

There’s lots of support available for people living with lung conditions, including online tools and communities. You can also join the conversation on social media to share your thoughts and views.

Online tools: https://www.blf.org.uk/technology-for-lung-health

Communities: https://healthunlocked.com/blf

Facebook: https://www.facebook.com/britishlungfoundation/

Twitter: @lunguk

Still relatively little is known about this new disease which has caused over 230,000 deaths worldwide and affected more than 3.2 million people.

How does Coronavirus affect people with lung conditions?

COVID-19 is a respiratory disease which is the same as Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome (MERS) and Flu or a common cold. This means that the lungs are the first organs to be affected.

Symptoms at early stages include a high temperature, shortness of breath and a persistent cough. These symptoms can appear almost immediately after exposure to the virus, or as long as 14 days later.

A high temperature or fever is on the top of the list of symptoms, according to the Centres for Disease Control and Prevention. However, not everyone who contracts the disease display a raised temperature. Research shows that around *70% of patients hospitalised did not have a fever.

Coughing is the most common of all symptoms, according to research by Boston’s Brigham and Women’s Hospital. Approximately **68 to 83 percent of their patients with COVID-19 had this symptom.

Other symptoms include 11-40% were suffering with shortness of breath, and in some cases, patients were confused, had headaches, nausea and diarrhoea.

As we have seen from the government bulletins, symptoms can range from extremely mild with no symptoms to potentially fatal. Early data from China suggested that ***81% of cases were mild and the rest were high risk.

Elderly people who had already been diagnosed with chronic medical conditions are at greater risk.

This variance also shows how the disease (COVD-19) can potentially damage the lungs.

In a report by ****The Lancet, it was identified that people may only have minor respiratory symptoms. Other people with the disease may also develop non-life threatening Pneumonia. However, there’s a smaller group of people who developed severe lung damage.

It has also been suggested that in patients who were severely ill, they were showing a condition called Acute Respiratory Distress Syndrome (ARDS).

ARDS isn’t just related to patients with COVID-19. There’s a number of other events that can trigger it, such as sepsis or trauma.

Damage is caused to the lungs where fluid leaks from tiny blood vessels inside the lung. This fluid then gathers in the air sacs (alveoli) which in turn makes it difficult for the lungs to transfer oxygen from the air to our blood.

Still, relatively little is known about the damage caused to the lungs by COVID-19, however it’s suggested to be similar to SARS and MERS.

A more recent study consisting of 138 people who were hospitalised with COVID-19, difficulty breathing happened after 5 days, ARDS then developed after approximately 8 days.

ARDS is treated using supplemental oxygen and mechanical ventilation, which is specifically to increase oxygen levels in the blood. According to experts, there’s no specific treatment for ARDS, this is purely to support the patient through the process. The body is then allowed to heal naturally and to build the immune system against the event.

Something which has been identified with COVID-19 patients, is that large numbers of them had potentially fatal low levels of blood oxygen. This has caused some confusion amongst experts as the patients did not appear to be starved of oxygen. Some experts are now rethinking where ventilation is the best cause of action.

How has COVID-19 impacted life insurance underwriting for lung conditions?

Currently there are a number of insurance providers in the UK ad globally who are restricting life cover terms for certain respiratory conditions. Our research suggests that a handful of insurers currently won’t consider offering cover for lung conditions or would postpone until more is known about the disease.

After several months we are still seeing restrictions in place by almost all insurers in the UK. Limits range from Body Mass Index (BMI) to chronic conditions such as Asthma, Diabetes, Heart Disease and Auto-immune Disease.

Currently it is suggested by a number of insurers that the limits will only apply to a small percentage of the population.

What if I already have life insurance and I get Coronavirus?

If you already have a life insurance policy in place then that should have already been accepted based on your health at the time. You should ensure that your cover is sufficient for your current needs, such as mortgage, children or funeral expenses.

Will life insurance pay-out for Coronavirus?

Life insurance with all mainstream or high street insurers will not exclude causes of death, such as COVID-19 related symptoms. The only exclusion which normally applies to new life insurance policies is suicide in the first year or two years, which is common.

What about if I’ve got a respiratory disease and I need life insurance?

In most cases it is still possible to get life insurance for people with respiratory conditions, such as Asthma, Bronchitis or Chronic Obstructive Pulmonary Disease (COPD).

There are some instances where the respiratory disease is more severe, where life cover may be postponed for a period of 6 to 12 months. This simply means that your cover will be offered to you after COVID-19 risk has dropped or a vaccine has been released.

If you need more help or guidance and what to do about your life insurance then you can call our team of experts on 0800 009 6559 or visit https://iaminsured.co.uk/.

Sources:

*JAMA Network https://jamanetwork.com/journals/jama/fullarticle/2765184

**Clinical Course and Epidemiology https://covidprotocols.org/protocols/clinical-course-and-epidemiology/

***CCDC Weekly http://weekly.chinacdc.cn/en/article/id/e53946e2-c6c4-41e9-9a9b-fea8db1a8f51

****The Lancet https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30374-3/fulltext

Everything you need to know about life insurance for Dads

Life insurance for Dads

Author: Daniel Sharpe-Szunko

Everyone is different and everyone’s circumstances are different too. Most dad’s will feel a sense of responsibility towards protecting their families and children.

Some of the main events that might prompt us to consider life insurance include:

  • Marriage
  • Becoming a Dad
  • Buying or renting a home
  • Divorce
  • Losing a loved one

Us dads need to stick together and as a proud father of two amazing children myself, I know how tough it can be.

Parents have a difficult job raising kids and managing everything else that life throws at us. It can sometimes seem like an impossible task but the most important thing to all parents is the wellbeing of our children.

Dads have historically been seen as the breadwinner in most households and the person needing life cover. Obviously things have changed dramatically over the past several decades and perceptions have evolved.

Interesting stats:

  • 72.5% of two parent households have both parents in work*
  • 45.5% of two parent households have both parents in full-time employment*

What’s the cost of raising a child in the UK?

The current estimated cost of raising a child to age 21 in the UK has increased by 63% since 2003. This is an increase of £2,000 per year which is on average almost double the rate of inflation.

The cost of a child in 2019:

  • £151,000 for two parent households**
  • £185,000 for single parent households**

When we consider that a child loses a parent in the UK every 22 minutes which equates to an unbelievable 23,600 per year.

How much does life insurance for a Dad cost?

According to a recent survey, most UK adults felt that the cost of life insurance was roughly four times higher than it actually is. Most dads could protect their families and their children for less than the cost of a couple of pints a week.

The cost of life insurance as of today’s date (18.06.2020) for a male, non-smoker, age 30 for £150,000 over 30 years is just £7.41 per month (£1.85 per week).

When you consider that the average mortgage debt in the UK today is £130,000 with a term of 20 years.

Should dads get life insurance if you’re expecting a baby?

There’s no bad time to sort life insurance so if you’re due to have a baby in the next few months, or even if you’re planning to have a baby, then get it sorted.

Becoming a new parent is an incredible time but also will be one of the most stressful and busiest times. It’s easy to forget about things like sorting your life insurance out if you’ve just had a new baby.

If you can sort out your life cover before your baby arrives then it may give you more time to consider your options properly. Make sure that you budget for this properly so you know that you can afford to maintain your premiums during maternity and paternity periods.

If you have a pre-existing medical condition then applying for life insurance might not be instant. In some cases we have seen applications last for several months while we obtain medical evidence from a GP.

Life insurance rates for new dads

There’s no better feeling in the world than the first time you hold your new born baby. As a dad, it’s the start of a long road of mixed emotions.

Life insurance sometimes unfortunately can slip to the bottom of the list of priorities which is understandable. Even though it’s a busy time, we should all be thinking about every way possible to protect that new born child.

Life insurance can provide them with instant financial protection if anything happens to either parent. But also, it will be cheaper to get life insurance sorted as early as possible while you’re still young.

Why is life insurance cheaper for younger dads?

Life insurance premiums and costs are based on your age so you should try to get it sorted as early as possible.

As we grow older, the risks of becoming ill and lifestyle related health conditions grows, so premiums for life insurance can be far higher.

In our experience, we see many young fathers requiring cover to protect their children which is fantastic. However we also see many fathers who have not thought about life cover until later in life, who have then developed conditions like Type 2 Diabetes or worse things like Cancer or Heart Disease.

“Sort it now… pay less and get your kids protected”

What about if I’m a dad already and have life insurance?

Firstly, if you’ve already got children and have life cover in place already, or if you were clever enough to get it sorted in the past then that’s fantastic.

It’s always advisable to review that cover to make sure that it’s appropriate or suitable for your new situation. You’ve got plenty of options with life cover because it’s pretty flexible so worth speaking to an adviser to find out more.

Some of the most common misconceptions about life insurance:

  • It’s a contract and you can’t cancel it or change it
  • There are charges for cancelling life insurance
  • You lose the benefits that you’ve already got
  • Insurers don’t allow you to have multiple policies

The good news is that you’ve got lots of options and the fact is that you ‘should’ review your life cover regularly. Especially at major events in your life such as having a child.

How much is life cover for older dads?

It’s true that as you get older and every time you pass another birthday, life insurance premiums will go up. The cost of cover is based on your age so will increase every year, which is why it’s better to sort it earlier in life.

If you haven’t sorted your life insurance earlier, or you need more cover, then it’s not a problem. You should just expect that you won’t pay the same as you did or would have done in your 20’s or 30’s.

There’s also health and lifestyle to consider, so if you’ve had a medical issue then that will be taken in to account. An expert like iam|INSURED will be able to help you to get fairer rates based on our many years of expertise.

Some of the main medical conditions that may become a factor in later life:

  • Obesity (high BMI)
  • Type 2 diabetes
  • High cholesterol
  • High blood pressure
  • Heart disease
  • Kidney disease
  • Mental health conditions
  • Cancer

Most medical conditions and other risk factors like occupations and activities can be covered, so that shouldn’t be a problem. Again you just need to consider this in your calculations for the premiums you might pay.

What about life insurance for working dads?

As mentioned above, most families will have both parents working either full or part time. So it’s important to make sure that if either income is lost then you replace that to make sure your lifestyle isn’t affected.

Life insurance is designed to replace the income of a family member if they become ill or even worse. In the event of the unfortunate loss of a parent, then you would want to make sure that you’re family don’t suffer financially.

You could look at several options for replacing your income if you weren’t able to work or were no longer around.

Some of the main life insurance options for working dads are:

  • Term life insurance (family protection)
  • Decreasing life insurance (mortgage protection)
  • Family Income Benefit
  • Income Protection
  • Critical Illness Cover
  • Personal Accident Insurance
  • Health Insurance

All of these products are designed to help you and your family in different ways if something happens to you.

It’s best to think about what’s most important to you and what would you want to protect.

What about self-employed dads?

In many ways it’s even more important for self-employed dads to get cover sorted, and especially if you just work for yourself. If your business would suffer if you weren’t able to work, then you should seriously consider protecting yourself.

There are also several tax efficient products which are available to self-employed people which can be paid through the business. You should speak to a business life insurance expert like iam|INSURED to find out more.

There’s an estimated 4.95 million*** self-employed workers in the UK, of which 920,000 work in the construction industry.

Life insurance for single dads

If you’re a single parent or a single dad, then you’ve got a different responsibility to two parent households. You might share childcare with your ex-partner or you may unfortunately be a widowed parent.

Life insurance can be set up easily on a single life basis which is common in this industry, as not everyone is part of a two parent household.

Also, you might want to set your policy up under a trust so that you know that only your children will benefit. We see this happening commonly where 2 parents have separated and the parents simply want to protect their children.

It’s often advisable to speak to your ex-partner to make sure that they’re aware of what cover you have in place.

Also, if you’re solely responsible for the financial security and well-being of your children then life cover is very important.

What if I’ve separated from my partner?

We often get asked by parents who have separated, to sort out cover for their kids which, could be from the old or a new relationship. It can become difficult to know what to do for the best and what your options are in the event of a separation.

Some of the main things to consider:

  • Ex-partner: you might not want your ex-partner to benefit from a life insurance pay-out if you die. In these circumstances you can write your policy in to Trust which can express your wishes to pay the benefit directly to your children
  • Joint policies: many people take out life insurance with a partner to protect their children which is normal. It might be that you continue to pay for this policy jointly or individually, or you could take out a new policy on a single life basis
  • Children from 2 different Mums: It’s possible that you could have children from different relationships with different mothers. In this situation there are several options to how to protect children in this instance and usually a Trust can cover this

The important thing to consider is that you’ve got lots of options so have a conversation with an adviser to see what you can do.

What about life insurance for dads with medical problems?

Often we see situations where one or even both parents have a pre-existing medical condition. These conditions can be mild with no major impact on lifestyle, but also can be more severe.

If you’re a dad with a medical condition or health problem then you should seek the advice of an expert, like iam|INSURED. In these situations, you should make sure that the premiums you pay are fair.

Some of the most common medical conditions for dads are:

  • Diabetes
  • Multiple Sclerosis
  • Epilepsy
  • Asthma
  • Mental illness
  • Cancer (e.g. Prostate and lung)
  • Heart disease
  • Kidney disease
  • Auto-immune disease (e.g. Chron’s or Colitis)

All of these conditions can be covered in most cases so you shouldn’t feel as though it’s just not available for you.

What about life insurance for dads who smoke?

Smoker rates for dads will be higher than non-smoker rates which is due to the increased future health risks.

Recent statistics showed us that in 2018 in the UK, 16.5% of men smoke (3.9 million) and 13% of women (3.2 million)****.

Some things you didn’t know about life insurance for smokers:

  • Nicotine replacement products (e.g. patches and gum) are classed as smoking
  • Vaping (e-cigarettes) is smoking (event with no nicotine)
  • Ex-smokers can replace cover at non-smoker rates (after 12 months)

If you’ve also become a smoker and already have cover in place that was taken out before you started, then any new cover will be based on smoker rates.

What about life insurance for dads with dangerous jobs?

Dads working in dangerous jobs such as construction, agricultural, tradesmen and armed forces, might have other risks to consider. In almost all job types life cover should be available so don’t let that put you off.

Often with hazardous occupations, life insurance is readily available at a fair price with no real difference to standard cover. There may be some additional considerations which could include:

  • Working at heights
  • Off-shore work
  • Dangerous or hazardous materials
  • Working in dangerous locations
  • Professional sports
  • Aviation

The reasons for needing life insurance could be considered to be higher if you work in any of these areas. Occupational risks are something to consider if you’ve got a family and you want to protect them.

How much life cover does an average dad need?

There’s no right or wrong answer to this question and everyone’s circumstances are different. It’s also true to say that everyone’s attitude to risk is very different so what you think is right, might be very different to someone else.

If you’re solely or partly responsible for taking responsibility for paying your household bills and supporting your family. You should make sure that you’ve got that covered if you’re not around or not able to provide an income.

Some of the main household costs to consider covering:

  • Mortgage repayments or rent
  • Bills and utilities
  • Monthly costs of living
  • Childcare costs

Other costs that may be incurred if you pass away:

  • Legal expenses (especially if business owner or self-employed)
  • Funeral costs
  • Loss of earnings

If you’ve not thought about it then it’s usually pretty simple to look at your monthly income and expenditure to figure out what you need.

Should a dad write a life insurance policy in to Trust or have a Will?

A fairly recent development is the ability to write a life insurance policy in to trust. This is a legal document that expresses your wishes for what you want to happen with the benefit payment from your policy.

Some of the main reasons why you’d want to write a policy in to trust are:

  • Inheritance tax planning: You could avoid having to pay IHT which could be up to 40% of your estate
  • Assign a Trustee: Your chosen trustee will be responsible for making sure that your wishes are actioned
  • Assign beneficiaries: You can select one or several beneficiaries who can receive a % of the benefit amount
  • Fast pay-out: A trust will avoid probate and means that your beneficiaries will receive their payment in weeks rather than months or even years

It is also advisable to have a Will in place which will help to outline your wishes should you pass away.

References:

* Office for National Statistics (Families and the labour market, England: 2018)

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/familiesandthelabourmarketengland/2018

** Child Poverty Action Group (The Cost of a Child in 2019) https://cpag.org.uk/sites/default/files/files/policypost/CostofaChild2019_web.pdf

*** https://www.gosimpletax.com/insights/self-employment-statistics/

**** Office for National Statistics (adults smoking habits in the UK: 2018) https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/bulletins/adultsmokinghabitsingreatbritain/2018#:~:text=In%202018%2C%20the%20prevalence%20of,2011%20(see%20Figure%201).

 

How are your life insurance premiums calculated

How are Life Insurance premiums calculated?

Author: Daniel Sharpe-Szunko

It’s important to understand how your life insurance premiums are calculated so you know what you’re paying for. Life cover is mainly designed to protect your family, home and business if anything happens to you.

Ultimately if you were no longer around to support your family or your income was impacted because of an illness or accident, these policies would relieve the financial burden. Life insurance, critical illness cover and income protection all come under the same umbrella of personal protection products.

Life insurance is the main type of cover because it’s the most common and the most affordable. This is simply because you’re much less likely to have to claim on a life insurance policy than critical illness cover or income protection.

A life policy is a contract between you (a policy holder) and an insurer. The policy becomes valid when premiums are collected (monthly or annually) after ‘acceptance terms’ are issued.

The policy is set to cover an amount (sum assured) over a period of time (term) to pay out to on death, serious illness or accident (depending on cover type).

What is life insurance?

A life insurance policy is simply a policy that pays out to a beneficiary (e.g. wife, children, partner or family) in the event of death. This pay-out is usually a tax free lump sum which can form part of your estate or this can be avoided using a Trust.

Life insurance also comes in 4 main forms which are all designed for different purposes depending on what you want to cover:

  • Level term (family protection) which is simply to protect your loved ones in the event of death
  • Decreasing term (mortgage protection) which is specifically designed to cover a mortgage (repayment mortgages only)
  • Whole of life is a more recent addition to the life insurance market which is a non-investment based guaranteed life cover
  • Family income benefit is also a newer type of cover which is specifically for your family and provides an annual income rather than a lump sum

All of these different types of life cover also cost different amounts per thousand pounds because of how they pay out. Whole of life is always the highest because it is guaranteed to pay out (as long as you continue to pay your premiums). Family income benefit is the cheapest because the amount of cover reduces faster than the other types of cover.

How are basic life insurance premiums calculated?

A life insurance premium is made up of several main factors before health and lifestyle are taken in to account. These are the things that would be taken in to account to give a base premium, which includes:

  • Age (Note: every time you pass a birthday your premiums will increase)
  • Smoker status (Note: No nicotine or nicotine replacement products for at least 12 months to be classed as a non-smoker)
  • Sum assured (amount of cover)
  • Term (length of policy in years or to age)
  • Type of cover (e.g. level term, decreasing term, family income benefit or whole of life)

Note: Gender– In February 2012 the EU Gender Directive made it illegal to use gender to differentiate between individuals for insurance

What else is used to calculate a life insurance premium?

There are also several other elements that are used to calculate the premium that a person (policyholder) will pay for cover. The following elements are behind the scenes calculations which will also be different for each insurance provider.

Underwriting process

When an application is submitted to an insurer, it will enter one of several potential routes depending on the disclosures. Generally the more complex the disclosures (e.g. medical conditions, hazardous occupations and dangerous activities) the more work that will be required at the back end.

The various types of underwriting processes are:

Underwriting Rules Engine (URE’s) which is where modern technology is used to apply a premium based on disclosures on an online application. Usually an insurer will allow a system (URE) to make a decision up to a set threshold (level of risk)

Manual underwriting is simply where an application will be referred to an underwriter (a person who assesses risk) to calculate a premium. An underwriter will also have certain limits that they will be allowed to go to before the next stage

Nurse screening or telephone medical will be used to gather additional medical evidence via a professional (e.g. nurse). These tests will usually include BMI (height & weight), blood sugar levels, cotinine test (smoker test), and blood pressure

Full GP report (medical report) which will be obtained directly from your GP or Doctor to provide a full breakdown of your medical history. Medical reports are usually for more complicated medical conditions or where symptoms are more severe

Once the underwriting process has been completed by whichever process, a premium will be offered based on information provided. Each insurer has a different set of parameters for each persons circumstances based on their ‘underwriting philosophy’.

Mortality and Morbidity data

All life insurance offices will have a team of actuaries who are mathematical people that calculate risk. These people will constantly be looking at trends in data which help them to make decisions for certain groups or risk categories.

Some of the most common types of morbidity are heart disease, cancer, chronic lower respiratory diseases, stroke, diabetes, pneumonia and influenza, Alzheimer’s disease, kidney disease and suicide.

Also co-morbidity is where two conditions occur simultaneously in the same person. The conditions don’t need to be directly linked to a cause, however they may often occur together. Some examples of co-morbidity are depression, diabetes and obesity which often occur together but are not likely to have the same cause.

There is no exact science to how an insurer will calculate a premium for an individual, however the insurer will use this information to calculate risk of death. It is a fair assumption for example that ‘a person in their 50’s is more likely to fall ill or have an existing medical condition to a younger person.’

Costs and margins

Any business will need to make sure that it is profitable and insurance is no different. There is a cost associated to running an insurance company and for processing an application. Each insurer will have their own costs and these will be different depending on the size of provider and how they operate.

There are several main costs that will be taken in to account when processing an application for life insurance. Some of the main costs will include:

Underwriting – a team of underwriters is a cost to a business so that must be taken in to account

Medical evidence – medical reports from a GP or doctor will costs anywhere between £60 and several hundred pounds

NTU rates (not taken up) – every time an application is processed that is either declined or not accepted, there will be a cost associated to that

Lapse rates (cancelled cases) – if a policy is cancelled within a certain period of time then it may then incur cost to the insurer

Generally bigger insurance providers are more efficient than smaller or newer insurance providers so can therefore drive lower premiums. Profit margins for life offices are difficult to project as they are forecasts based on future premium collections and potential claims.

For more information about this subject you can contact one of our team of experts at iam|INSURED on 01244 732896.