Declined insurance

jonny2510

I've just had an application for life insurance declined

What I'm really concerned about is that whenever applying for insurance (house, car, travel etc), there always seems to be a question:

"have you ever been declined insurance, had it cancelled or any special conditions imposed?"

Do I now have to always answer yes to this?

I expect if I do, I'll get told to ring, and will never be able to get another quote online again, ever .

Does the answering yes to the above only apply to applying for life insurance, or will it apply to all kinds of insurance (i.e. car, house or travel)?

Should I be concerned about this?

On a side note, it looks as though the insurance was cancelled for a medical reason, possibly because I declared absolutely everything I could think of, so as to be on the safe side!

I also realise I may now need an IFA/mortgage advisor to advise further with regards to this (much to the amusement of the professionals who followed my other thread regarding arranging it myself I'm sure :rotfl:)

OshayAway

jonny2510 wrote: »

I've just had an application for life insurance declined

What I'm really concerned about is that whenever applying for insurance (house, car, travel etc), there always seems to be a question:

Do I now have to always answer yes to this?

I expect if I do, I'll get told to ring, and will never be able to get another quote online again, ever .

Does the answering yes to the above only apply to applying for life insurance, or will it apply to all kinds of insurance (i.e. car, house or travel)?

Should I be concerned about this?

On a side note, it looks as though the insurance was cancelled for a medical reason, possibly because I declared absolutely everything I could think of, so as to be on the safe side!

I also realise I may now need an IFA/mortgage advisor to advise further with regards to this (much to the amusement of the professionals who followed my other thread regarding arranging it myself I'm sure :rotfl:)

A good adviser may still be able to help you depending on the circumstances of the declinature. Most (but not all) term assurance providers ask about previous applications. Have you been given specific reasons why your application has been declined?

By default, you will normally receive a standard letter with vague wording stating for health reasons... However, if you request a reasons why letter, more detail will be given. This will either be sent to you directly or to your GP depending on the insurer and/or reason for decision.

In some instances, giving too much information can be counter productive. I'm not referning to non-disclosure but rather that volunteering information outside of the questions parameters. For this reason, chosing a provider which askes specific a certain way can work to your advantage. By way of example, if an adverse decision was based on a combination of risks including family medical history, some insurers may only ask about those over a higher age than another, thereby not requiring it to be disclosed. Other examples include BMI and control of medical conditions etc.

It's difficult to be more helpful without a bit more information but there may be hope yet.

weighty1_2

Hi Jonny,

I only arrange life cover type plans, but as far as I'm aware you do not need to disclose this declination for buildings/contents/car insurance etc.

I completely disagree with OshayAway in that giving too much information is counter productive. Insurance policies are arranged on an uberrima fides basis (utmost good faith). This means you have a duty to disclose any condition which you feel an insurance company is likely to see as relevant. Whilst it's quite an ambiguous statement life insurance companies don't decline applicants for nothing so there is obviously something of significance. The examples about family history that OshayAway gave would be ignored if the company doesn't ask after a certain age (I've come across this many times with clients) and you can't just bend the truth regarding your height/weight ratio or about ongoing symptoms for a current condition.

There are a couple of websites that deal with higher risk life insurance cases (Life Cover for All, QuoteRack, Insurance Surgery). If you just google pre-existing condition life insurance you should be able to find them.

OshayAway

You don't seem to understand my point Weighty1 but in fairness, perhaps I havent explained myself very well. I'm pushed for time now but will put a bit of 'meat on the bones' shortly.

OshayAway

weighty1 wrote: »

I completely disagree with OshayAway in that giving too much information is counter productive. Insurance policies are arranged on an uberrima fides basis (utmost good faith). This means you have a duty to disclose any condition which you feel an insurance company is likely to see as relevant. Whilst it's quite an ambiguous statement life insurance companies don't decline applicants for nothing so there is obviously something of significance. The examples about family history that OshayAway gave would be ignored if the company doesn't ask after a certain age (I've come across this many times with clients) and you can't just bend the truth regarding your height/weight ratio or about ongoing symptoms for a current condition.

Ok, so let me explain my comments to clarify. Firstly, full disclosure is paramount, there is no escape from this whatsoever. Anyone who deliberately withholds information from an insurance provider is playing a very dangerous game. However, having said that, the fact is that Insurance companies assess and perceive risk differently, this is reflected in the variations to what questions are asked and how. In other words, what may be a problem for one insurer, may not be for another.

There are numerous examples of this and I could write reams of scenarios and examples from experience. To keep it concise though, I'll keep it as simple and just expand on my initial post. When I say "too much information can be counter productive" you will note that I added "I'm not referring to non-disclosure but rather that volunteering information outside of the questions parameters. For this reason, choosing a provider which asks specific a certain way can work to your advantage." Sorry if that wasn't very clear. Let's say one insurer asked about a specific condition 'in the last 5 years...', if an individual had to answer 'yes' to that question where they wouldn't to a different provider which asked 'in the last 2 years...' Not disclosing that condition would not be a non-disclosure issue.

However, if the information was volunteered, let's say it was within 4 years but the life assured wanted it 'on the record', that can prejudice an application. It doesn't sound fair, even contradict TCF but it is a fact. It's one of the reasons that GPs are not supposed to send photocopies of a patients entire records, just ask pedro.

In the same vein is the point I raised regarding family history. All insurers ask the question relating to a specific age, most are interested in first degree relatives conditions prior to age 65. Some however, limit it to age 60. If you have a parent or sibling with a hereditary condition diagnosed at age 62, you would not need to disclose it to a provider who asked "before age 60..." If you disclosed it anyway, that could prejudice your underwriting outcome.

Don't get me wrong, your suggestion that my examples about "family history... would be ignored if the company doesn't ask after a certain age" is totally reasonable, it just not always how it works. Medical evidence paints a picture for underwriters, if they become aware of facts outside of their remit, this can, in some circumstances, prejudice an application and be reflected in the terms. I have had examples of this taken to complaint level as my understanding was as you describe.

Finally, regarding your comment "you can't just bend the truth regarding your height/weight ratio or about ongoing symptoms for a current condition." I'm not entirely sure how you interpreted my post that way but let me clarify. BMI is a good example of where insurers vary, one provider may apply a +100% for a particular BMI, where another may only load by +25%, to be clear, for the exact same height / weight... no suggestion of any 'truth bending!' Let's say that there are other factors to consider such as a stress / anxiety disclosure. Some providers will apply a +100% if recent, even if very mild, another insurer may be happy to offer standard rates on this basis.

Underwriters also vary as to their total loading cut-off point. So if one insurer uses a value of 250% where another will go as far as 400% before decline. This can be a reason where terms may be available from one but not another.

One other example that demonstrates this very simply is the smoker and asthma combination. Many providers will outright decline regardless of tobacco usage and even if the Asthma is exceptionally mild. Some, will offer terms with a moderate loading.

Please be assured weighty1 that I am not trying to pick a fight but this is an area I have a great deal of experience. Just last week I arranged cover at standard rates for a client who had been declined by two separate providers in the last 6 months. That is by no means an isolated case. Any IFA / broker who has submitted applications to multiple insurers for best terms will confirm that this proves it is possible to get a better outcome with one over another.

It's not a case of non disclosure or bending the truth, rather 'horses for courses'.

Verbum sapienti sat est J

weighty1_2

Hi OshayAway,

Excellent re-post!

I certainly don’t see it that you’re picking a fight……I’m sure you wouldn’t have gone to the effort of such a detailed post if this was the case.

Just to clarify where my misunderstanding arose (I'd use the "quote" function but I can't seem to get it to work properly!) you mentionned providing "too much information can be counter-productive" then a couple of sentences later mention the BMI and control of medical conditions, which I took to mean "too much (or too accurate) information may be counter productive".....Based on your response I fully appreciated that was me mis-reading your intentions.

All the points you make regarding loading parameters are spot on and excellently positioned. Personally, I only write business which would be classed as "higher risk". Probably only 20% of my clients obtain the standard rates, the rest are loaded to varying degrees. Even with those who are offered standard terms it is only due to savvy use of my underwriting knowledge and undertaking some due diligence by discussing cases with underwriters pre-sale. I pride myself on ensuring a client obtains the lowest possible loading....it's good for the client's pocket but also ensures I suffer very few clawbacks!

In relation to insurers having too much information, which has ultimately changed their decision, my experience is somewhat different to yours. This has only happened to me once regarding a client who was a diver in the oil/gas industry. I was advised on a £1/mille loading due to the occupation, however, following completion of the application they loaded the plan £2/mille, on the basis that we disclosed he was undertaking welding underwater which they saw as an increased risk. At no point was this mentionned as being significant during the pre-sales call, as their manual confirmed loadings based on depth of dive, whether they ever dive alone and if there is any use of explosives. One 5-minutes call to Zurich saw them overturn the decision and offer the £1/mille loading as advised. No need for a complaint and I didn’t even really need to kick up a fuss.

Maybe I’ve been lucky?

I find several insurers these days don’t even deviate from their underwriting “flow-charts” and use any personal interpretation. Ageas is the perfect example of this. They’re great in that you will definitely get the right decision (provided the plan can be underwritten from the app alone) but they ask so many questions that even when I’ve taken as much information as possible up front they usually come out with something that I don’t have available!! To be fair though, this lack of personal interpretation tends to be more prevalent when there aren’t multiple and associated risk factors.

Sounds to me like we both do similar things but have just had slightly different experiences over the years? Bully for us I say. Far too many advisers know so little about underwriting processes and guidelines that they simply apply to the cheapest provider irrespective of underwriting factors….and then wonder when their commission gets clawed-back following the likes of us getting hold of the case!!!

Carpe Diem…..it’s the only other latin I know

weighty1_2

Back to the topic at hand....why not PM OshayAway Jonny? He obviously knows what he's doing and it sounds very likely he can help!!

errrr, it's not against the forum rules to promote someone elses business is it???

OshayAway

Thanks weighty1, I'm glad we cleared that up! I find variations in underwriting stance from different providers very interesting (I can't find a way to express that without it sounding really sad!) but as a result derive a great deal of satisfaction from finding best terms for individuals. Such ones appreciate the results to. It's no wonder why many advisers don't carry out exhaustive research because, done right, it can be quite time consuming.

I've had similar experiences with Zurich. It's so useful to be able to discuss a specific case with an underwriter post-application who can review it while on the phone and issue improved terms when quoting the pre-application call reference.

In the case of the OP, as stated, the first port of call is to request a 'reasons why' letter to provide more detail for the decision. Apart from the obvious advantage, this will bring to light if the decision has been based on correct information or not. It will also allow a decision to be appealed against. Something else that can help is to see a copy of the completed report sent by the GP. It has to be kept on file at the surgery for a minimum or 6 months for exactly this reason.


Underwriters can only base their decision on the evidence obtained. A decision to decline will typically be due to one of the following:

• Perceived too high risk due to correct, comprehensive medical evidence. In this case, it will be a case of trying another provider with a different underwriting stance.
• Family medical history, in extreme cases in isolation or otherwise in combination with potentially relevant risks.
• Incorrect or incomplete information. This can occur when an underwriter is assessing information provided by a GP. As they can only act on the information provided and have to deal with worst case scenarios. So, where information in ambiguous, they will assume the worst. In my experience, this often happens when a report is completed by someone at the surgery other than a medical practitioner. Pesonally, I think this practice of having an administrator complete the report from medical records should be outlawed.
• Outstanding tests, where a scan or test was not completed. Can be a tricky one if the condition is recovered from. A letter from the GP / consultant or re-referral for the test can resolve.

In the first 2 cases, which are by far the most common reasons, the help of a good broker is essential. As already mentioned, the difficulty is finding one to do the research in full. The key is to find one who has access to the whole market and ask them for a copy of all the research.

jonny2510

OshayAway wrote: »

In the case of the OP, as stated, the first port of call is to request a 'reasons why' letter to provide more detail for the decision. Apart from the obvious advantage, this will bring to light if the decision has been based on correct information or not. It will also allow a decision to be appealed against. Something else that can help is to see a copy of the completed report sent by the GP. It has to be kept on file at the surgery for a minimum or 6 months for exactly this reason.

Apparently the application has been declined "due to the medical and family history disclosures on your application".

Should I be able to get more specific details above and beyond this?

Is a "reasons why" letter a standard industry term that I should request?

When I carried out the application, it said they'd need to get more details from our GPs, though it was in fact declined before they spoke to the GP. In fact I found out it was declined, and then got the application form through the post a day later to sign (including the access to medical records authorisation). This is what leads me to believe I may have overstated one or more things to do with my medical past.

iqCarInsurance

There is no question that having had your application declined will have an effect when you apply for life insurance gain. But as for home and car insurance, I really don't think you will face any problems.

System

I think we need to be clear what "declined" means.

If I fill in my details on Quotezone for motor insurance, I will get a long list of quotes ranging from £150 up to £8,000, and also lots who don't want to quote. That doesn't mean I have been "declined" insurance in the ordinary sense of the word, it means my particular requirements are not within the criteria that they want in their client portfolio at that moment.
If that means "declined" in the disclosable sense, then probably every single person in the country would be obliged to answer YES, and would then have to reveal a long list of all the Quotezone examples.

Similarly, you might be declined life insurance because:
they don't like horse riders
they only insure non-smokers
they have an age cut-off
they have an assured value cut-off
etc.

When I was arranging insurance for my old boat, classic insurers were happy, but some ordinary insurers said they didn't cover wooden boats over 25 years.
Do I have to disclose this ten years later when applying for car insurance? Nonsense.