Life Assurance for Type 1 Diabetic

moomintroll_3

I just realised (I know, I know) that the life assurance I have to cover the mortgage has several problems. I took the assurance when I took the mortgage (I know now, the wrong thing to do) but have realised that:

1. The assurance doesn't cover the entire mortgage any more so is virtually no use.
2. I never got round to telling them that I am now a type-1 (insulin dependent) diabetic (diagnosed July 2003).
3. I want to change to level term rather than MDTA anyway as I want to ensure my wife and son have money to live on if the worst DOES happen.

I assume that any broker / insurance company I approach is going to want a medical report which isn't a problem as the diabetes is well controlled (no neuropathy, retinopathy etc. and HbA1c in the low 5% region where the NICE guideline is 6.5% and was 7%).

So, given that I've been throwing my money away for the last 2 and a half years I'd like to get this sorted ASAP...

Can anyone give me any pointers of good brokers to talk to? I know all the online portals assume good health so I can't use those.

Any and all advice gratefully received.

Thanks.
G

dunstonh

1. The assurance doesn't cover the entire mortgage any more so is virtually no use.

It doesnt stop the policy being any use. It just means you have a shortfall.

2. I never got round to telling them that I am now a type-1 (insulin dependent) diabetic (diagnosed July 2003).

You dont need to tell them if the event occurs after commencement.

3. I want to change to level term rather than MDTA anyway as I want to ensure my wife and son have money to live on if the worst DOES happen.

Fair enough but you may find keeping the existing one cost effective. It premiums are a concern, then you may consider waiting until April before making changes when pension term assurance comes back into play.

I assume that any broker / insurance company I approach is going to want a medical report which isn't a problem as the diabetes is well controlled (no neuropathy, retinopathy etc. and HbA1c in the low 5% region where the NICE guideline is 6.5% and was 7%).

There is often an extra section for you to detail your medication and situation with diabetes. The more info you give, the quicker the decision will be.

Can anyone give me any pointers of good brokers to talk to? I know all the online portals assume good health so I can't use those

Any independent should do you fine. Service is something we cannot tell you about here as like any industry, some will be good, some will be poor. Ideally, pick a local IFA and not a salesforce IFA. You can often spot the difference by the telephone number. If its not a local number, then it it probably a salesforce.

moomintroll_3

Thanks for the help dunstonh...

There's a bit I don't understand and was wondering if you could clarify.

dunstonh wrote:

Fair enough but you may find keeping the existing one cost effective. It premiums are a concern, then you may consider waiting until April before making changes when pension term assurance comes back into play.

What is 'Pension Term Assurance'?

Ta.
G

dunstonh

Its a life assurance product. Very similar to level term assurance except it can only do life assurance and cant have any addons (like critical illness cover). Biggest difference is that you get tax relief on the premiums at you highest marginal rate.

It become mostly obsolete in 2001 when the rules last changed. However, from April 2006, the rules are changing again which will allow it to be sold again in the mainstream. Currently it is treated as a designated investment product so can only be sold by investment advisors. It should be de-regulated after April to allow protection advisors to be able to sell it as well as well as IFAs. You will probably start seeing it appear on consumer quote portals some time during 2006.

So in summary, if a level term assurance premium was say £20pm, you would expect the pension term assurance premium to be £21pm gross. With basic rate tax relief, the direct debit would be £16.38. A higher rate tax payer could claim a further £3.78pm making the effective cost £12.60. Thats £7.40pm cheaper than the level term assurance.