For many of us the decision of when to take out personal risk insurance is governed by major life changes. The purchase of a new home, birth of a child or marriage are the three most common triggers to take out Insurance, and most usually it is for Life cover, to provide a lump sum after a tragedy. But what happens to the funds to cover you and your family’s living expenses if you are unable to work due to accident or an illness?
“Statistically the chances of needing some form of Insurance become more likely as we get older. But with that increased likelihood the result is a higher premium cost, and the only time that you know for certain that you require insurance cover is when it’s too late to get it! But it’s not just your own health and lifestyle that can affect the type of cover that you are able to obtain. Previous client experiences highlight how the health of our nearest and dearest can have a detrimental effect on our own insurance applications.
Every Insurance company has an application form that goes through your previous health history but most of them will also have a set of questions relating to the health of your immediate family. While it may seem irrelevant, a brother, sister or parent suffering from an illness or having had a major medical event may be an indicator of a family history lending itself to health issues. On one occasion we had a client whose two sisters had both had cancer. They had both made full recoveries and had slightly different types of the disease, but our client’s application had exclusions for any type of stomach cancer. When we challenged the insurer’s decision, the underwriter advised us that with their family history they were 6 times as likely to contract a similar condition, and while they weren’t saying that this would definitely be the case, they refused to cover the condition due to the increased risk. While there was no direct connection between their lifestyle choices, there was a direct connection between their DNA and consequently the insurers felt the need to get some additional background before they were happy.
So, how can you avoid such restrictions being put on your own Insurance cover? Remember the reason for taking out Insurance is to protect you and your assets in the event of a traumatic or tragic event. The easiest way is to make sure you have cover in place before you or your relatives develop any conditions that may limit the type of cover available. It is easier to review and change your policy later if your cover was originally set up when you had a clean bill of health. Strange as it may seem, if you start your Insurance when you’re younger, the cost of your premiums will be considerably cheaper when you get older and are more likely to need to make a claim.
