Why is it so hard for me to get income protection insurance?

mpreed

Hi

I've been trying for the past 18 months to get income protection insurance, and am facing severe problems.

I'm 46, and self employed, so some form of income protection insurance is a necessity.

I first attempted to get it over a year ago, and was turned down by a 'new on the block' insurance company because my blood test results had a couple of results that were outwith their acceptable range. They also quoted the fact that I had been signed off from work over ten years ago with stress, and although there had been no further instances (and to be honest the time off was driven by work politics so was an exceptional case) I had recently been to my doctor to get a recommendation for a private councillor who I see about once a month, purely to talk things through with due to my living on my own, and I find it helpful to talk various (random!) things through with them rather than on my own.

When I spoke directly to the underwriter I was told the stress part was irrelevant and wouldn't have caused a rejection on it's own, the rejection was down to the blood test results.

Consequently, at the start of the year, I totally revamped my lifestyle habits, ate a healthier diet, and am now over three stone lighter and much fitter.

With the support of my doctor, who was astonished at my being rejected due to him seeing nothing on my record he felt would prevent me being rejected, I took another blood test earlier this year and we went back to the insurer who had rejected me. I was rejected again, with the reason being given that I had a record of stress! Obviously I was furious as I had been told this was irrelevant previously.

I refused to appeal again on the basis that if it was this hard to take out a policy with this company, how hard would it be should I ever need to claim? I have consequently been told by another FA that the company involved came aggresively into the market, undercutting other insurers, but consequently were very strict on who they accepted.

So, last month I tried again with another company. The medical went fine (so I thought) but I have just been told that although the initially quoted premium was just over £200 a month, the revised one is just over £400 a month. I have been given no reason for this doubling in premium and I was surprised that my FA recommended I accept this.

I have been repeatedly been told by the people filling in the paperwork for me and doing the medicals that I was the easiest / cleanest they have done and I have not had a day off work for over two years due to illness. I go to the gym between three and five times a week and am in the best shape of my life. When I had the medical I chatted to the nurse about my 'target weight' and she commented my waist size was below that at which the insurers would be worried.

So why am I finding it so hard to get income protection insurance? I know some of the above is hearsay and it all comes down to the underwriters but how can I get a reasonable decision from them?

I have asked my FA to go back to the current insurance company offering me this increased quote to ask them to send me details for the doubling of the premium, but I have seen my doctor's report and it has nothing on it to cause these issues (confirmed by my doctor) and have gone to pains to explain the stress / councillor situation.

Can anyone recommend a way to get a fair and reasonable income protection insurance?

ACG

The insurance company would usually offer to write to your GP with the reasons for the rating.

At the minute you dont know the reason for the rating so its difficult to say, it could be BMI or stress (if your still seeing someone then it could be seen as you are still recieving treatment) - there are too many possiblities at this stage.

Your broker needs to get to the bottom of it, even if its a case of writing to your GP atleast then you have a starting point.

mpreed

ACG wrote: »

The insurance company would usually offer to write to your GP with the reasons for the rating.

At the minute you dont know the reason for the rating so its difficult to say, it could be BMI or stress (if your still seeing someone then it could be seen as you are still recieving treatment) - there are too many possiblities at this stage.

Your broker needs to get to the bottom of it, even if its a case of writing to your GP atleast then you have a starting point.

Thanks for your reply.

I've insisted that on the form for the medical and the initial application, there was a full description of why I see the councillor and that this is unrelated to stress. I've also offered for the councillor to confirm this in writing if required.

The nurse also took me through her tests and told me they didn't use BMI as in builds like my own, it's misleading, and that I came out fine on the equivalent test they do.

Unfortunately my broker's response is still to pay the increased premium and he's saying there isn't much point going to other insurers as they will say the same thing. When I told him I wanted to challenge the decision his reply was to say he didn't think it could be challenged but if I wanted to try, he could get me their phone number! To be fair, he's not the insurance expert in the company and hopefully his colleague will be better able to help.

At the very least I will insist on seeing the reasons, but I'm not sure how much joy I will get challenging it.

It's a tough one, as I need to have this insurance but I absolutely resent my premium being doubled for no good reason - although this is an assumption until I get the reasons.

ACG

I used to work for a life office as an account manager. I was obviously biased and on the side of the broker (not the underwriters) as my bonus relied upon it.
There were times when i couldnt understand in a month of sundays why the underwriters made some of the decisions but when they went through the reasons they made perfect sense.

To be honest any sign of stress gets alarm bells going. No prizes for guessing that back pain and stress are the biggest reasons for them having to payout.

You could maybe ask if they would offer standard rates if they apply an exclusion for the stress or whatever it is that is causing the loading.

Its easy for the broker to tell you to pay the higher premium, but at the end of the day its not their money. On a £200 a month premium they will probably be earning a lot of commission, on the other hand though - its only a 100% loading which in the grand scheme of things isnt a huge loading, they can go upto about 300%.

mpreed

ACG wrote: »

I used to work for a life office as an account manager. I was obviously biased and on the side of the broker (not the underwriters) as my bonus relied upon it.
There were times when i couldnt understand in a month of sundays why the underwriters made some of the decisions but when they went through the reasons they made perfect sense.

To be honest any sign of stress gets alarm bells going. No prizes for guessing that back pain and stress are the biggest reasons for them having to payout.

You could maybe ask if they would offer standard rates if they apply an exclusion for the stress or whatever it is that is causing the loading.

Its easy for the broker to tell you to pay the higher premium, but at the end of the day its not their money. On a £200 a month premium they will probably be earning a lot of commission, on the other hand though - its only a 100% loading which in the grand scheme of things isnt a huge loading, they can go upto about 300%.

Thanks again for the information.

To be fair to my broker, he is waiving the extra commission that would be involved which takes the premium down to c. £370 a month, but I still want to see the reasons for the increase, and if necessary, get the opportunity to challenge it.

starrystarry

mpreed wrote: »

With the support of my doctor, who was astonished at my being rejected due to him seeing nothing on my record he felt would prevent me being rejected...

...I have seen my doctor's report and it has nothing on it to cause these issues (confirmed by my doctor)...

With all due respect to your doctor, he isn't an income protection underwriter, so he shouldn't really comment on it. He may be a medical expert, but he's by no means an expert when it comes to assessing the risks involved here.

ACG is right, your history of stress in combination with your recent counselling will ring alarm bells. Stress/anxiety etc is the biggest alarm bell when it comes to underwriting income protection.

You need to speak to the underwriters really, get a proper explanation re their decision.

mpreed

starrystarry wrote: »

With all due respect to your doctor, he isn't an income protection underwriter, so he shouldn't really comment on it. He may be a medical expert, but he's by no means an expert when it comes to assessing the risks involved here.

ACG is right, your history of stress in combination with your recent counselling will ring alarm bells. Stress/anxiety etc is the biggest alarm bell when it comes to underwriting income protection.

You need to speak to the underwriters really, get a proper explanation re their decision.

Agreed, and that's why I tried to point out that ultimately it was all hearsay.

I suspect the issue is the stress, my point in posting was really to see if there was any point trying to persuade the underwriters that the stress issue isn't one that merits doubling the initial premium, or is it, as my broker suggests, a waste of time?

It does seem an unfair system, if this is the case, where I have medical professionals willing to testify that I have no indications of stress but am unable to communicate this to the underwriters.

ILW

How much cover are you looking for?

mpreed

ILW wrote: »

How much cover are you looking for?

£3k per month

ACG

If its down to stress then you can appeal it with help from your GP and psychologist - however it would be a lot easier to just get a stress/anxiety exclusion applied.

mpreed

ACG wrote: »

If its down to stress then you can appeal it with help from your GP and psychologist - however it would be a lot easier to just get a stress/anxiety exclusion applied.

Thanks for that info - that's precisely the information I was looking for as my broker has been saying that I really have no option other than to pay the increased premiuim, whereas that appeared to me unjust as there had to be some way to appeal it. I will also query the exclusion - presuming that stress is the reason for the hike (which I'm sure it is)