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    • willieormandsheroes
    • By willieormandsheroes 15th Sep 17, 12:11 PM
    • 39Posts
    • 28Thanks
    willieormandsheroes
    Life Assurance Policy Weighting
    • #1
    • 15th Sep 17, 12:11 PM
    Life Assurance Policy Weighting 15th Sep 17 at 12:11 PM
    I took out life assurance two years ago as cover for our repayment mortgage. At the time I declared that three years previously I had received treatment for stress and anxiety and self-diagnosed alcohol issues. I say self-diagnosed as I did not have a doctor or my GP telling me that I had to stop drinking - I just decided that it was best to cut right down and indeed stop as that was I felt linked to my mental issues - and so I stopped.

    The insurer decided that because of my alcohol declaration they would double my premium (from £50/month to £100/month). My financial adviser of the time who arranged the assurance advised that were I to request a review a couple of years later then there would be a very good chance that the weighting would be removed.

    I have - and it hasn't

    I'm not getting this. I self-declared my decision to stop drinking. I made no declaration of the amount that I drank - which could well have been within the government advised limit - I just stopped as I decided that alcohol and me didn't mix that well. My decision to stop was also influenced by my religious beliefs which I felt were being compromised by my drinking alcohol.

    It is now over 5 and half years since I stopped drinking - not touched a drop. I feel generally great - and surely having stopped drinking my life event risk has dropped quite significantly

    Any advice. It's not that I can't afford the premium - but the logic of the risk weighting is lost on me.
    Last edited by willieormandsheroes; 15-09-2017 at 12:14 PM.
Page 1
    • Chris Pollard
    • By Chris Pollard 15th Sep 17, 6:01 PM
    • 87 Posts
    • 33 Thanks
    Chris Pollard
    • #2
    • 15th Sep 17, 6:01 PM
    • #2
    • 15th Sep 17, 6:01 PM
    I presume you asked your existing insurer to review the rating that was applied to your contract. This being the case, unless they agreed when the policy first started, they will refuse as to fully re-underwrite you they would want to check every aspect of your health, lifestyle, not just the specific reason they may have applied a loading. The terms & conditions probably do not allow them to do this, plus such a process would incur significant "non standard" administration and costs; medical evidence, underwriter time and potentially their systems can't cope. So, the long and short of it is that most insurers will simply say that if you want to be reassessed you will have to apply for a new policy.

    I'll try and explain the "logic". It might take a bit of imagination but I hope it helps to understand the "pooling" approach insurers take. Your insurer judged the likelihood of a claim was 100% greater that for another customer who represented an average risk. Whilst a very personal and individual decision, this isn't how the insurer sees it. You are effectively joining a "pool" of people who are also considered to have a 100% higher likelihood of a claim.

    For simplicity's sake, imagine this insurer had only two pools of customers, Group A; 10,000 lives that were rated at 100% and Group B; 10,000 that were average risks. The insurer assumes (in the long term) that the claims experience from Group A would be double Group B. This does not mean that everyone in Group A will claim earlier than everyone in Group B.

    If the insurer provided customers with the option to review their terms for all its customers, only those who expect to benefit would ask for a review. A customer who was an average risk but who had been diagnosed with cancer wouldn't risk being reassessed and losing their insurance. Two years ago, the insurer decided to put you in Group A.

    This doesn't mean that two years later, the same insurer, or indeed another insurer would make the same decision. I hope I've explained the logic from a "pooling" point of view, but I can't really help explain the specific underwriting decision made two years ago. That is a matter between you and your insurer. If everything in else in your circumstances is the same as it was two years ago then I'd tend to agree that you would be perceived as a better "risk" than two years ago. Only way to know for sure is to test the market. I'd recommend that you seek the input of a financial adviser as they are very familiar with the situation you are in and this approach will increase the likelihood of you getting a better deal that trying yourself. Importantly don't cancel your policy until any replacement policy is live.

    Good luck, and hope this helps (and apologies for the length of the reply)
    • willieormandsheroes
    • By willieormandsheroes 15th Sep 17, 9:43 PM
    • 39 Posts
    • 28 Thanks
    willieormandsheroes
    • #3
    • 15th Sep 17, 9:43 PM
    • #3
    • 15th Sep 17, 9:43 PM
    Many thanks. I'll go to our FA as he organised the assurance in the first instance. What gets me is that I think the premium weighting was applied because I stated that I thought I was drinking too much and that might have been linked to my stress and anxiety. and so had stopped.

    Now I haven't drank for over 5 years - and yet my premium is not adjusted accordingl and I must be lower risk.

    Anyway...maybe I should have just kept my mouth shut about stopping drinking when I took out the policy as according to my GP my treatment and consultations were to address stress and anxiety.
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