Diabetes is a major health issue in the UK, with 3.8m people diagnosed with the condition and a further 1m unaware they have it. While having diabetes increases risk on protection policies, insurers are exploring ways to provide affordable cover to these individuals.
Finding a way to provide cover is a pressing issue. Since 1996, when 1.4m people had a diabetes diagnosis, the number has almost trebled. Further, Diabetes UK predicts that if nothing changes the figure will exceed 5m by 2025.
Adding to the pressure is the fact that the age at which diagnosis for type 2 diabetes occurs is starting to fall. For years, it has been regarded as a disease that mainly affects the over-40s, but latest figures from the NHS show 715 people aged under 25 were receiving care for type 2 diabetes in England and Wales in 2016-17 – a 41 per cent increase on three years earlier.
With the number of people with diabetes on the rise, insurers have stepped up their approach to providing life insurance. A handful of providers, including AIG, Old Mutual, Royal London and Vitality Life, now promote the fact that they can offer cover for people with diabetes.
Helen Croft, underwriting and claims strategy manager at AIG Life, says: “We have covered diabetes since we launched 10 years ago. It is the 11th most common disclosure, with around three per cent of our applicants declaring that they have diabetes.”
Given the increased risk, more information is required during the application process. This typically includes details such as when they were diagnosed, which type of diabetes they have, the latest glycated haemoglobin (HbA1c) reading, and whether there are any complications such as neuropathy or kidney disease.
These details will be assessed alongside other medical information such as height, weight, blood pressure and cholesterol levels to determine whether someone can be covered.
Alan Knowles, managing director of Cura Financial Services, says: “Most insurers are comfortable offering cover to individuals with type 2 diabetes, where it is well controlled and there are no major complications. Some will even get standard rates.”
Although this is unusual, he says this might be the case where someone is in their 60s, has been diagnosed in the past couple of years and is controlling their condition. Otherwise, loadings are the norm, with insurers able to increase premiums by up to 400 per cent dependent on the risk.
Some insurers have developed specific products for people with diabetes. These include Royal London’s Diabetes Life Cover and The Exeter’s Managed Life.
These products work in a similar way, enabling customers to reduce future premiums if they can demonstrate they are managing their condition. To do this, they need to provide their HbA1c results every year.
At Royal London, customers can reduce their premiums by up to 40 per cent if the results show their condition is improving. At The Exeter, policyholders are given a target HbA1c to achieve, and if they successfully reach this by their one-year anniversary they are entitled to a discount, which can be up to 35 per cent.