Life Insurance & Finance

With the continuous advance in the medical field, critical illnesses such as cancer, stroke, heart disease, multiple sclerosis, etc are being discovered prematurely. Therefore, the chance of pulling through the critical illness could be much higher. Recent statistics state that there has been a minor increase in critical illness among people. Consequently, this has resulted in much more people seeking a critical illness cover.

Going through a critical illness could be quite a harsh time. As financial breakdowns occur, money is needed for your treatment. Critical illness insurance could be the right answer for you at this tough moment in your life. Though advances in the medical industry now make it possible for more survival cases, disability may still occur. As a result, the use of a wheelchair may require different attention. Your lifestyle could be changed. You could even resume work after a long time of rehabilitation.

Here are some statistics about the growing need of a critical illness cover in the UK:

According to Munich Re (2002), 1 in every 3 men between the ages of 40 to 70 are likely to develop a critical illness. More precisely speaking, 32 in every 100 men may suffer from a critical illness. Out of these 32 men, 15 can develop cancer, 10 are likely to have a heart attack, 5 may suffer a stroke and 2 can undergo a coronary artery bypass surgery.

As for women, 1 in every 4 women between the ages of 40 to 70 may also develop a critical illness, which is 25 in 100 women. Out of these 25 women, 17 are likely to develop cancer, 3 can have a heart attack, 3 may perhaps suffer from a stroke, 1 may be capable to undergo coronary artery bypass surgery and 1 is likely develop multiple sclerosis.

Let’s see some statistics about three of the most life threatening diseases in the UK: cancer, heart disease and stroke.

Cancer
According to Cancer Research 2002, 1 of every 3 people may be diagnosed by a critical illness such as cancer. On the other hand, 1 of every 4 people is likely to pass away due to this critical illness. Moreover, four types of critical illnesses dominate the painful world of critical illness. These are: lung, breast, colorectal and prostate. Furthermore, according to Munich Re 2002, a quarter of the population in the UK could probably suffer from this critical illness in the future. Also, more than half of the people who suffer from cancer such as breast, cervix, testis, etc. may survive for a minimum of 5 years.

Heart disease
According to the British Heart Foundation 2002, each year about 280,000 new cases of coronary heart disease in the UK are most likely to occur. As seen, the level of this critical illness is quite elevated. Also, less than half of those suffering from a heart disease may die within 28 days, which means that care may be probably given on time. Moreover, about 28,000 coronary artery bypass surgeries are carried out each year, perhaps a 5 times increase since 1980. It is therefore unfortunate to see that a critical illness such as coronary heart disease can be the most common cause of premature death in the UK.

Stroke
According to the stroke association 2002, about 100,000 people may suffer from stroke each year in the UK. Around 10 percent of victims of this critical illness may be of retirement age. Stroke can be considered as a severe critical illness as its impact could be big on someone’s life. About 33.3 percent of people who suffer from this critical illness are likely to become disabled. The similar percentages of people may die within a year while the remaining can make a good recovery. Stroke is probably one of the largest causes of disability in the UK, with over 300,000 people being affected at any time.

As seen, these statistics show that we should be concerned about critical illness. Many people are left with no other choice than taking a critical illness cover. Although critical illness is a preventive measure, as it should, the cover can be useful by sometimes awarding you a payment at the right time, to save your life.

Smokers and the overweight are seeing increased life insurance prices. The insurance industry is penalising these people with higher costs of cover.

The way insurance companies calculate premiums is to work out the risk to them of the customer dying while the policy is active. When looked at from this point of view, smoking and obesity are obviously very important factors in this consideration.

Some pro-smoking groups assert the point that according to statistics smokers under 40 are as likely to die as non-smokers of the same age group. However, as Sainbury’s life insurance manager, David Pickett said: “Health risks associated with smoking can have a big effect on life cover costs. It is vital for those who have kicked the habit to review their policies”.
A recent study conducted found that the average smoker paid 56% more than a non-smoker for a life insurance policy. This study was based on nine top UK insurance companies, based on quotes for two men aged 20 asking for £100,000 cover over a 25 year period. The only difference stated on the applications was that one smoked and one didn’t.

As well as toughening up on smokers, the overweight have seen increases in their policies. Recently insurance companies have changed their approach to the obese, the Body Mass Index (BMI) that affects insurance has been lowered from the previous figure of 33 to a BMI of 28. This is a reduction of 16%, anyone with a BMI above 28 faces a 50% rise in premium prices.

Life insurance companies will calculate your BMI, if it exceeds the limits deemed acceptable by the company a doctor’s report may be requested. If the BMI is very high the company may ask you to have a medical examination, if this exam concludes that the customer’s weight is of concern then the policy will be increased by a minimum of 50%, but this can rise to 400% in the case of the morbidly obese.
Life insurance companies do have some tolerance for weight gain, for the middle aged they accept that people naturally put on weight as they age. Age is taken into account alongside weight when insurers take applications.

Obesity is a growing problem in the UK and a serious threat to health, as insurers are making clear, over the last 20 years obesity in UK adults has dramatically risen, with more than 60% men and 50% of women deemed overweight or obese.

So if you’re intending to apply for life insurance it would be beneficial to lose a few pounds first if you’re currently overweight. It’s not quite as simple for smokers, to be seen as a non-smoker by insurance companies you must not have consumed any form of nicotine during the previous 12 months, although some insurance companies extend this period to five years.

Due to the fact that premiums for smokers and the overweight as so high the importance of seeking out a competitive policy rises. The best way to do this is to use a comparison website such as Onlyfinance.com, which means you only need to input your information once and hundreds of policies will be reviewed, and the best price and package will be selected.

Obviously the policies found on a comparison site will still be higher for smokers and the overweight but the best available deal for you will be found. The importance of life insurance is becoming clear to everyone nowadays, it provides peace of mind, if something did happen then your family will not be left in a state of financial confusion. The popularity of policies has also mean the life insurance leads market has remained a busy and profitable one.

Advances in medicine and increased life expectancy have diluted the importance of life insurance, according to a leading South African surgeon. Dr. Marius Barnard asserted that these days critical illness insurance is a wiser investment due to its practical benefits.

Dr. Barnard, who created the first critical illness insurance in 1983, said: ‘If you die at 30, life insurance was more important, but if you get a critical illness at 55, or 45 when you are at the height of your earning ability and you have an operation and survive another ten to 20 years, then Critical Illness Insurance was more important.

Where workability decreases and the ability to provide for your financial needs diminishes, I think that the critical illness policy is much better.’
This view is based on a much higher national life expectancy, alongside rapidly developing medical research that makes it possible to diagnose previously fatal conditions and prolong the patient’s life. A patient diagnosed with a serious illness but living for a further twenty years would receive a payout on their critical illness cover that they would not get on their life insurance policy.

Critical illness insurance has risen in scope and popularity over the last few years to cover 58 conditions as opposed to 4 when it was first introduced. It now includes functional diseases such as multiple sclerosis and an estimated 12 million adults and children are covered by a critical illness policy.

However, there have been many stories in the press concerning aggrieved policy-holders whose insurers have reneged on their critical illness cover. An investigation carried out last summer by the BBC’s One Show discovered that many conditions that the policy-holders believed were covered were excluded and that the terms of the policies required meticulous medical records to be kept.
A spokesperson for the show said: ‘It’s no mean feat remembering every single visit to the doctor – but that’s what insurance companies expect you to do when you’re filling out a critical illness form – and it’s the kind of question that’s catching a lot of people out. The first thing is to remember that insurance companies are profit-making enterprises. The onus is on you to make sure that you’ve covered all your bases before you get ill, rather than expect any goodwill from the company when disaster strikes.’

Dr. Barnard is keen to highlight the number of successful cases of critical illness cover payouts: ‘All I hear when I walk around here is that 20% of critical illness claims are not paid. However, the fact is that 80% are paid. Statistics such as 20% of the claims are not being paid are not strictly true because 20% of the claims should not be paid because they don’t fit the criteria.’

He has also outlined what changes he would like to see in the form and structure of critical illness insurance. As things stand at the moment a lump sum is paid out to the holder upon diagnosis, but Dr. Barnard would prefer it to be paid out in stages as the illness increases in severity: ‘Diagnosis is getting better and most people have treatment and then walk out. If they continue to receive full payout at diagnosis, the cover will become so expensive it will no longer remain affordable for those that really need it.’

HIV Life Insurance used to be an option that just did not exist for people infected with the HIV virus. Many life insurance companies just don’t have enough information to make a fair assessment of the risk for insuring people with HIV for life insurance.

A study performed by the Dutch Association of Insurers announced on March 15, 2002, that “HIV is no more of a risk factor for insurers than someone with diabetes – a positive step toward increasing the insurability of HIV patients.”

The study examined the mortality of HIV positive patients from a life insurance standpoint. Among this group the probability of death due to being HIV positive was found to be as low as one-tenth of one percent per year. These odds put HIV positive patients in the same risk category as people living with a serious heart problem or diabetes.
In the past, life insurance companies would not insure a person they knew to be infected with HIV. However, due to major advances in the treatment of the HIV virus, it is now possible for people with HIV to get life insurance.

When applying for life insurance it is important to know that you must disclose your HIV positive status to the insurance company. If you don’t and the insurance company finds out, your coverage will lkikely be cancelled.

If you contract HIV after your life insurance policy is issued, your life insurance policy cannot be canceled based on your HIV positive status.

Guaranteed Acceptance Life Insurance may be one option for people living with HIV. But there are restrictions on these life insurance policies. There is usually a waiting period of 2-3 years. That means the coverage does not take effect for that time period, but you are required to pay your premiums. If you do not outlive the initial waiting period, the life insurance policy would pay nothing to your beneficiary.
The benefits offered by guaranteed issue life insurance policies are usually limited to up to £25,000 of coverage.

The cost of guaranteed issue life insurance may be expensive, averaging £50 or more per month, depending on the life insurance policy, carrier, your HIV status, and the coverage amount.

This type of coverage is usually only available to people over the age of 40 or 50, in most cases.

Make sure you pay the life insurance premiums, if you miss a payment, your policy may be canceled and you may lose all the money you put into your policy.

Another option for HIV life insurance may be your Employer group life insurance policy. Once your employment ends you may be able to convert your group life insurance policy into an individual life insurance policy. But this change must usually take place within 31 days of the end of your employment.

Or, you may want to join a union, association, or credit union in order to be eligible for enrollment in their group life insurance policy.

There are some life insurance companies that have chosen to offer life insurance policies to people with HIV.

People under the age of 49 may qualify for £25,000-£250,000 of life insurance, depending on your current health, and the level of the virus. About 50% of HIV-positive people who have sought coverage have been denied, from the time Guarantee Trust started offering the coverage in 1997 through 2004. Coverage availability may be limited.

 The requirements as well as the amount of coverage available may vary by company. You may want to contact an independent insurance broker to get your life insurance quote from these companies.

If you are over 50 and you want to get life insurance
, you have to make sure you are getting the best price and the right benefits. What each person needs will vary greatly depending on age, family situation, job status, occupation, and medical history. There are so many variables that it is almost impossible to get accurate life insurance quotes without a lengthy discussion with an insurance agent. You also have to consider what you need as far as coverage, or if you just need something to go on top of what you already have.

When seniors over 50 are looking for life insurance quotes, you can find information online, but you may not be able to give you an accurate quote via a website. You should make plans to go see someone in person so that you know the quote is accurate, and that you understand what you are getting for the life insurance quotes that you are hearing. You want to understand the policy that you are being offered down to the last tiny detail. If you have a hard time reading technical information, you need a person to explain it to you in plain language.
If you have medical issues, or you are near or past retirement age, you may find that your life insurance quotes are much higher. You are a bigger risk at that point, and that will be reflected in the price of your policy. You also have to decide if you want full term insurance, or if you want to have a term life policy. If you are sick, you are going to pay a lot of money, if you can find someone to cover you, that is. Make sure all of the details of life insurance quotes are clear so that you don’t do something to void your policies. If you find the policy is too complicated, you might want to go somewhere else.

The best think you can do is gather many different life insurance quotes, and then compare them to see what is best for you. You may find that all of the life insurance quotes you get are very similar, or perhaps you will find that one sticks out above the rest as being the best deal. Remember to find one that makes sense for your life, and one that will give your family what they need in the event that they have to cash in the policy. You don’t want them to be left in the lurch should something happen

PPI or Payment protection insurance, also known as Credit protection insurance or Loan repayment insurance is designed to cover a debt that is currently outstanding. It is made to protect your mortgage, credit cards or loan payments in the unfortunate event that you cannot work because of an accident or sickness, or if you have been made unemployed. Various people call it with different names like Accident, sickness and unemployment (ASU), life & accident, sickness and unemployment cover (life and ASU), Mortgage payment protection insurance (MPPI), Personal loan protection (PLP) or credit card repayment protection (CCRP). These policies are usually sold when one applies for a credit card, loan or mortgage.
In the event of a death, the unpaid portion owned on a loan such as car, bike, boat loan is fully paid. What’s best about payment protection insurance is that for the claim the requirements are just a minimum. One should have the coverage for at least six months before you can be covered by the benefits of the product. It is highly recommended by financial experts to take ppi especially in case of a Secured Loan. Secured Loans are risky for your house, and ppi reduce the risk to a great extent. It makes provision for your loan repayments if you are not able to. The payments are charged to your account monthly on the credit cards and on loans they are pre- calculated into the balance. But, you have to at least have the coverage of six months to avail the benefits of it.

One can purchase this protection from various agents. Not only the agents, can you buy this loan from internet as well. Buying the PPI from the internet has various advantages and disadvantages as well. Advantage is that one can buy it from his/ her home only and can have variety of deals to look for. Disadvantage is that it can be risky to deal online at times as; the sites can be scam as well. Thus it is advised to always consult a specialist before dealing in such matters.
Most people feel very safe and secure while buying this protection. The big secret with PPI is that it’s just an insurance policy and you do not have to buy it from the person who’s offering you the loan. It’s sort of like a home insurance policy where a person can deal as long as he/ she is offered a good price.

It offers peace of mind as it covers you in an unforeseen life event. Life is uncertain and there is no surety of death and no one is sure of the period of one’s employment. So, it’s better to protect yourself and your family’s future. It’s not possible for everyone to qualify for a life insurance but, everyone can qualify for payment protection. It is often said that it costs more to save then it cost to spend.

One of the biggest fears for many people is not being able to pay the mortgage – or meet other financial commitments
 - if they are made redundant or unable to work due to illness or accident.

This is particularly worrying in the current uncertain climate, but one of the simplest ways to cover loss of earnings is by taking out income protection.

What is income protection Insurance?

Income protection pays out a regular tax-free replacement income if you are unable to work because of ill health or an accident; it enables you to pay the mortgage, as well as the daily costs of living.

How does it work?

Income protection policies pay out a set amount of income after a specified period of time, and you can elect a waiting period of between one and 12 months; the longer you defer, the cheaper the policy.
It usually then pays out until you either return to work, retire, the policy expires – or death.

How much does it cost?

Premiums are based on age, health, amount covered, term of the policy, waiting period, and whether you smoke.

For a 25-year old male with cover until the age of 60, the average premiums range from £23 per month for a four-week deferral period, to £11 per month for a 52-week deferral period (*).

The rates for women are slightly higher, and the average cost of for a 25-year old female with cover to age 60 range from £34 per month for a four-week deferral period, to £15 per month for a 52-week deferral period (*).

Should I take it out?

While life insurance might be the first protection policy that springs to mind when you have children, and mortgage payment protection insurance (MPPI) the first policy when you buy a new home, income protection could actually be the better option.
This is because it’s a lot more likely that one or both parents will not be able to work through long-term sickness than through dying, and because MPPI offers limited cover, and policies can be relatively difficult to claim on as they often include a number of exclusions.