Impaired lives. High-risk individuals. Quirky or hard to place cases.
While all these descriptors seem to suggest an atypical individual - in insurance terminology at least - the ironic thing is that individuals labeled in such a way are becoming almost as commonplace as typical or so-called ‘standard’ risks.
In today’s world of diversity and inclusion, any adviser worth his or her salt should be doing all they can to ensure that even those who consider themselves uninsurable get the essential protection they need.
There are rapidly growing numbers of self-employed, freelancers and contractors in the UK.
Latest estimates from the Office for National Statistics (ONS) put the figure at 4.8m: 15 per cent of all people in work and up from 3.3m at the start of the decade (12 per cent of the labour force).
But about 15m people in England have a long-term condition, or chronic disease, according to a report by The Kings Fund. That represents nearly a quarter of the 54m people in England.
Stuck in the past
The reality is that ‘higher risk’ applies to many of these people: the long-term sick as well as people of a certain occupation or employment status. Depending on the type of protection product in question, a builder, for example, could fall within this category due to this being considered a risky occupation, as might a freelance delivery driver because if you can’t drive, you can’t work. Usually, these would typically be considered run of the mill occupations in most societies.
- 'high risk' applies to a number of people in the protection sector
- Guardian recently announced simplified definitions and the removal of exclusions on some policies
- Getting cover for the quirky cohort necessitates that advisers really get to know their clients
But, in the race to be the cheapest, the insurance definition of what constitutes high risk has arguably widened – and certain swathes of the insurance and advice sector haven’t really kept up with the changing needs of society.
Andy Peters, distribution director of protection disruptor Guardian Financial Services, comments: “Whether deliberately or simply because it was the established way of doing things, many insurers have adopted practices that effectively put their own financial interests before those of their customers.
“This has led to complicated policy wordings, exclusions and unnecessarily tough underwriting criteria which have typically caused a laborious sale process and – much worse – ambiguities about what is, and is not covered.
“This resulting lack of trust has made it difficult to convince customers of the value of protection.”
Guardian recently announced simplified definitions and the removal of exclusions for critical illness cover and terminal illness benefit on life.
Although the provider does not offer a “heavily impaired protocol”, says Mr Peters, it does have “a bespoke and inclusive underwriting process and we’ve happy for advisers with such clients to contact us or apply to see if their client could be accepted.
“We also offer our adviser network access to an underwriting tool for commonly disclosed conditions called ‘Underwriting Qi’ which will equip advisers with information on likely terms and medical requirements.”