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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

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…

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.

Why have I been refused life insurance and can I still get cover?

What to do if you’ve been declined life insurance in the past

(Author – Daniel Sharpe-Szunko)

A lot of people come to us after they’ve been declined life insurance previously. Nobody likes to be turned down for anything and life insurance is no exception. It can feel demoralising or even offensive if you have a medical condition and you get told cover isn’t available.

There are several main reasons why you might have been declined for life insurance by an insurer. It’s important to remember that insurers are all different so just because you’ve been told no before, that’s not always the end of the road. Feeling annoyed or frustrated is totally understandable and it’s natural to question whether applying again is worthwhile.

Why have I been declined life insurance?

You could have been refused cover for several reasons which are unfortunately quite common. Most life insurance applications are declined because of medical conditions, occupation or dangerous activities.

If you’ve applied for cover in the past and your application was refused, then it might be because of:

  • Insurance advisor might not have the expertise and the skills to find an appropriate or suitable insurer
  • Insurance providers have different underwriting philosophies so some may decline cover where others could accept. Your adviser should be able to identify which insurers are best for each situation and persons circumstances
  • Medical disclosures might be incorrect or inaccurate so it might be that there was a simple error with submitting your application
  • Medical evidence may be requested in some instances which can expose additional elements which can cause concern. It’s important to know what might be on your medical report before applying for cover
  • Timing could be wrong so you might have applied when your medical readings were high or not as well controlled. If you’ve made changes to your lifestyle or treatment which has improved your condition then things will have changed
  • Smoking is sometimes a red flag with life insurance and especially with certain medical conditions, such as diabetes, cardiovascular and lung disorders. If you quit smoking more than 12 months ago then definitely try again
  • Underwriting changes could mean that cover which wasn’t available before has now become available. Underwriting philosophies can and do change so you should keep checking just in case this happens

Does being refused life insurance have any impact on future applications?

You should know that insurers do not share personal information about individuals. The only real reason why being declined cover might have an impact in the future, is if you re-apply to the same provider.

It may just be as simple as you didn’t remember which company had declined you in the past, or you didn’t know who they were. It’s a common and simple mistake so don’t worry if this happens. This happens to lots of people and is certainly not an issue so let someone find the right insurance provider for you.

What are the main medical reasons for declined life insurance?

Some of the main things that could cause a medical decline for a life insurance application are:

  • Recent diagnosis such as cancer or heart attack
  • Ongoing treatment which includes chemotherapy and radiotherapy
  • Combinations of conditions such as Diabetes and Heart Attack
  • Undiagnosed conditions where symptoms are identified
  • Outstanding investigations, results or surgeries
  • Higher than normal results or readings (such as blood sugar, cholesterol or blood pressure)

You should know that there are usually other options and solutions in a lot of these instances so don’t be put off. It might also be a case that cover may not be available now through mainstream insurers but there are other options.

Do life insurance companies share medical information?

The simple answer is no they don’t unless it is agreed by the insurance companies and the applicant. Generally this does not happen more often than not because of the potential issues around data protection and sharing of personal data.

Do I have to pay more for life insurance because I’ve been declined?

Again the answer isn’t necessarily yes and some insurance companies might still offer cover and even be cheaper. Insurance underwriting is a complex calculation which is individual to each company and pricing will vary from one company to another.

If you’ve had a quote from a company in the past then by shopping around and applying to the right insurer, you might still be able to get cover cheaper. Your insurance adviser should help you to find which provider is cheapest and who will accept you.