Disclosure (Cheap as chips Pt.2)

Thursday, 17th November 2011 10:10 - by Resident IFA

The case I mentioned in 'Cheap as chips!' two days ago has already been accepted. Now, this in itself is not earth-shattering. The wonders of modern technology facilitate underwriting decisions instantaneously; providing the case is 'clean' i.e. the applicant has no health concerns/adverse history. The case in question was referred back to a human Underwriter, but the 'obvious' decision was made with 24 hours. Before clarifying 'obvious', it is worth mentioning that the Client was applying for 2 benefits: - Life Insurance - Waiver of Premium The Life insurance was accepted at standard rates...which reminded me to break-off from writing this to put the policy in-force! The Waiver of Premium benefit protects the policy premiums against longer-term sickness i.e. were the Client to fall sick, in 6 months' time, the Insurer will start to pay the premiums on the Client's behalf. Thus, the policy will not simply lapse due to adverse events, possibly outside of the Clients' control. The Insurer will cease paying premiums when the Client is well again/returns to work. Back to my use of the word 'obvious' - the Client suffers from lower back pain; a sure-fire way for the Insurer to simply decline this benefit (albeit not the main gist of the policy) pretty much out-of-hand. This alleviates the potential for lengthy delays and expense brought about by requesting a GPR (General Practitioner's report) from the Clients Doctor to confirm the extent of the condition. I would rather my Clients get a better shot at obtaining Waiver, but I can see the logic in the Insurer's actions; especially when the Waiver benefit costs just a few pence and comes second by a long distance in terms of policy benefits and what the Client wanted. One interesting aside is that the Client stopped smoking in May this year, so I quoted at both Smoker and Non-Smoker rates for them, advising that the Insurer would likely make them pay Smoker rates as they had not given up cigarettes for a full 12 months yet. The Insurer did indeed impose Smoker rates, taking their premium from £11-odd per month to nearer £17. I think my Clients are quite happy to leave it - in case they lapse with a 'social' cigarette at some point! - but I have nonetheless diarised for May 2012 to ascertain the situation at that point, to see if we can re-approach the Insurer to seek Non-Smoker rates. Until next time...