What if my premium increases?
The basic premium quoted is subject to underwriting and may increase due to health or lifestyle reasons. Current figures show that 85% of cases are accepted at ordinary rates with no increase from the basic. 14% are increased due to health or lifestyle reasons and 1% are declined.
Your insurer will consider your application, confirm any details with your doctor and/or you, and then offer terms in the form of an acceptance letter. At this point you can commence the policy and will be asked for a date to do so, called the start date.
If you are not happy with the premium quoted we can pursue another application with a different insurer for no further fee, or we can refund half of your fee if you decide not to go ahead and cancel the application. Before you decide either way, it is important to remember three things:
- Most insurers will use the same national statistics to calculate risk and the majority of medical conditions are rated (premium increased) by all insurers. However you may find an insurer who will not rate your premium as much as the initial, cheapest company quote.
- An insurer will increase your premium due to your own personal details, and this will not change regardless of which broker or IFA you buy the policy through. If a policy provider decides you are a greater risk than average, your advisor or broker cannot have any influence upon this.
- Any increase will be as a percentage of the original basic premium.
E.g. £25.00 per month with 30% rating added = £32.50
The point of using Cavendish Online is to remove 100% of the commission usually paid out by your insurer, which reduces your monthly premium, leaving you paying only for the insurance policy, without anything added going to a third party. Any percentage increase due to your health or lifestyle may increase your premium, but you are still being offered the lowest possible premium for you. A commission based broker will earn extra commission on your rated policy.
Common reasons for premium ratings/increases
Smoking status – If you have given up smoking in the past year, you need to be aware that you will only be considered a non-smoker once you have not smoked any tobacco or used any nicotine replacement methods (patches, gum etc) for 12 months. If you have quoted at non-smoking rates and it is found that you are still classified a smoker, the premium offered will be at smoking rates.
- Asthma + Smoking – Although it is rare to be rated for asthma, it may cause an increase if you smoke. This is because smoking not only aggravates the condition but stops medicines and inhalers working.
- Body Mass Index (BMI) - A high BMI increases the probability of many life threatening illnesses and will therefore increase your premiums for life cover and especially for Critical Illness Cover. However this does vary between insurers, and ratings are determined by your age as well as your height and weight measurements. An allowance is made for people becoming heavier as they get older. Some insurers start to increase premiums at a much higher BMI threshold than others, so if you are only just above average it is worth having a ring around before you choose which company to apply to. It should be quite easy for an underwriter to tell you what their usual rating is for your height, weight and age. Bear in mind though, that a high BMI can increase the rating applied to other medical conditions you may have. Health statistics show that risks are usually greater than the sum of their parts when combined.
- Diabetes – Both types 1 and 2 increase the probability of other serious health problems, particularly cardiovascular conditions, strokes and blindness. It is very likely that you will be declined Critical Illness Cover if you have either Type 1 or 2 diabetes. Life cover will usually be offered at an increased premium depending on the nature and severity of the condition, and the older you are when taking out the plan the greater the increase is likely to be. Type 1 diabetes, even when controlled perfectly with injections, with blood sugar never testing above 7, will usually be rated higher than Type 2. However Type 2 diabetics often have other health issues which can add to, or multiply any increase.
- Anxiety/stress/depression - could result in anything from acceptance at standard rates to a decline of cover, depending on the nature and severity of the condition. For this reason underwriters often have to request additional medical evidence (GP reports, questionnaires etc) to enable a fair and accurate assessment to be made of each individual case.
- Heart Attack/High Blood Pressure/Raised Cholesterol – These health issues depend upon nature and severity. Extra evidence will be requested form your GP and you may be contacted for either a telephone interview with a nurse or a mini-medical.
Increases due to occupation
- Working at heights of over 40 feet.
- Working with explosives.
- Offshore oil and gas, dependant on exact location and nature of duties.
- Over or underwater e.g. fishing or diving.
- Machine/mechanical workers & building site workers.
- With regard to the armed forces, the main factor that would contribute to an applicant being declined is the likelihood of them being posted to a combat area. Otherwise, they are unlikely to be declined but exclusions may be applied to the terms offered to cover their occupation. It is the exact nature of duties that determine a decision, so an armed forces questionnaire will be issued.
Similarly the same sorts of increases can apply if your hobbies involve any of the above hazardous activities. However this will depend on how frequently you partake in the activities and in the case of extreme sports, if you compete.
Expert Advice on Life Assurance, Critical Illness Cover and Income Protection
It is important if you are unsure of any aspect of your Life Insurance that you get advice to determine the most suitable cover at the most competitive price.
Cavendish Online advisers (in partnership with Vita) can help you decide which type of insurance is right for you.
To speak to an adviser please call 03456 44 25 40 or click here for more details.