The insurance industry provides life assurance and other protection products for the majority of its customers as a matter of routine. But, says Paul Sandilands, for a section of society, "ticking the box" may not be an option.
Thanks to increasingly sophisticated IT systems much of the work associated with arranging cover can be dealt with online. But, for an increasingly large section of society, this may not be possible.
Newspapers, television magazines and other media are filled with reports of the growing problem of diabetes, obesity, heart disease and other health problems that plague our affluent society. Advances in medical knowledge leading to earlier diagnosis of disease and new and improved treatments now enable individuals with illnesses that had previously resulted in a premature death, to live long and productive lives.
Thanks to a number of insurance specialists the cover required by those members of our society who are unable to ‘tick the box’ can, in many cases, but by no means all, be fixed.
Noticeable Factors
In the recent past, two factors have become noticeable. Firstly, the range of problems protection specialists are asked to consider is growing all the time. Secondly, although there are of course limits to what can be done, it is noticeable that the range of cases going ‘on risk’ is also increasing. This is a result of continuing medical advances leading to better mortality statistics which have allowed underwriters and their reinsurers to rate such risks with a higher degree of confidence.
As an example, a common problem today is obesity. It has to be said that some of the requests for cover that come to us are difficult to imagine ever being capable of being underwritten. None the less, the Body Mass Index (BMI) limit to underwriting is expanding. From this year it has become possible to underwrite up to a BMI limit of 60. This translates into an individual with a height of 5’10” and a weight of 29 stone 7 lbs, which is considerable.
The problem with ‘height weight’ cases is that they are so often associated with other problems such as diabetes or heart disease but underwriters will have taken these factors into account when rating the case.
Heart disease is still a problem for western society. Although the reduction in smoking is having a beneficial effect, nationally more needs to be done to increase awareness of the problems of salt intake and processed foods. In terms of medical history, it is not so very long ago, December 3rd 1967, that Dr Christian Barnard performed the world’s first heart transplant in Cape Town’s Groote Schuur Hospital. Today, heart surgery is commonplace and the outcome for patients very beneficial, with a good quality of life being achieved for patients both young and old.
Expanding life assurance boundaries
Providing cover for individuals with heart disease that has developed at a young age has been difficult, but within the last months it has been possible to give an indication of premium for a male life where a heart attack had been suffered at the age of 23. The individual is now aged 34. Terms have not yet been finalised but it is doubtful that last year the case would have advanced as far as it has. Whatever the outcome, this case is symptomatic of steadily expanding life assurance boundaries.
Organ transplant cases still represent something of a challenge, but again there are possibilities. There are kidney and liver transplants with life cover made available after successful surgery. Kidney transplants are comparatively straightforward. The ‘easiest’ cases are those where the donor is a live identical twin, where life assurance maybe obtainable in as short a time as one year after the operation. Genetically related recipients and donors can also be favourably looked upon. Transplants from other non related live donors can result in life cover being available two years from the operation. A transplant from a deceased donor may require three years to have elapsed since the operation. Of course, these are rough guidelines only as each case is individually underwritten.
The work of specialist insurers is dependent on the skills, knowledge and experience of the underwriters involved and their commitment to what they do. For example, a member of the Pulse team was recently able to arrange, and be fortunate enough to attend, a meeting at Addenbrookes Hospital in Cambridge. At this meeting, discussions took place between one of the country’s leading transplant surgeons and an underwriter from Kiln Life at Lloyd’s. It is hoped that, as a result of this meeting, data will be made available to enable underwriters to get an up-to-date view of the results from this type of surgery.
It is because of meetings such as these, and the continuing training and research of life underwriters, that the boundaries of life assurance can be pushed out in response to applicant needs.
The range of illnesses for which specialist underwriters have made life assurance available has steadily increased. They include: diabetes, heart conditions, hepatitis, cancer, weight problems, HIV, high blood pressure, depression, respiratory disorders and rare problems such as Wolff Parkinson White disease, Adams Oliver Syndrome, Neurofibromatosis and many others.
Of course there is a limit to what can be done. Cover cannot be arranged for applicants who are still undergoing radio or chemotherapy. Usually it is only possible to arrange cover in cancer cases where treatment ceased at least one year ago. Applicants who continue to smoke following heart or cancer surgery will almost certainly find it impossible to get cover.
Cruel irony
There is something cruelly ironic in the fact that life cover for individuals who are on dialysis, awaiting kidney transplant cannot be arranged, whereas cover can be provided once the transplant has taken place. I have heard from an observer of a kidney transplant operation how astonishingly quickly the health of a transplant recipient improves. NHS Blood and Transplant (NHSBT) is to be congratulated on all it is doing to increase the awareness of the need for donors and the Human Tissue Authority ( HTA) for providing the framework for dealing with the ethics of organ donation and the regulation of living organ donation.
Certainly it is important that the life assurance industry is seen to play its part in the opt in/opt out donor card debate, as well as other difficult ethical issues in this area. Put bluntly however, it can be said that the more donors there are, the more successful transplants there will be and this will in turn increase the possibility of the insurance industry being able to deliver life cover to individuals whose lives have been disrupted by kidney failure (see end of article).
Not all the work of the insurance protection specialists is related to medical issues. We have been drawn into providing assistance in arranging life cover and other insurance protection, where the cover has been difficult to obtain for reasons other than medical. So we have been asked to arrange cover where the applicant’s nationality, lifestyle, nature of work and/or location of work is creating problems in obtaining the cover required. There have been incidents of being asked to arrange life cover for offshore well testers, stock car racers, air traffic controllers and airport fire fighters. We have been asked to arrange Life and Personal Accident cover for missionaries in Papua New Guinea, and income protection for an opera singer.
In all this, protection specialists are providing a complementary service to the big players, who can provide cover in ‘standard’ cases quickly and efficiently. Although we can, and do, provide a swift indication of premium, the work we do is necessarily slow and methodical and we cannot provide a firm quotation until we have received all the necessary medical information. Every reader of this magazine knows what a frustrating business this can be.
While it is to be hoped that ‘tele-underwriting’ may, in time, provide a solution to this problem, it has to be recognised that this data capture technique is probably best suited to cases that belong to the ‘tick the box , no problem’. Impaired lives are most likely to require a GP report. Improvements in processing the medical evidence required will need to be agreed not only by underwriters but also, of course, by their reinsurers.
In any event, what matters is that the insurance industry provides, and is seen to provide, the service that its customers require. Specialist companies can ensure that the insurance industry reaches out as widely as possible to the greatest possible cross section of our society. n
Paul Sandilands is managing director of Pulse Insurance
