4/10 life insurance customers ripped-off by ratings

Shocking research from specialist insurance website BestDealInsurance.co.uk reveals how greedy life insurers are making huge profits from loading up customers’ life insurance premiums for what are sometimes only minor ailments.

David Thomson, Chief Executive from the company says: “It is scandalous just how many consumers are getting hammered by their life insurer for so-called health risks. For example, if you want insurance and a family member has multiple sclerosis some companies will impose a limitation on to what you are covered for.

“And if you are a female and have a family history of breast cancer (where the sufferer was aged under 50) you will attract an automatic 50% rating from one insurer but will pay standard rates with another”.

He adds: “Ten years ago, around 80% of us would have taken out life insurance at a standard rate, with no loadings. Yet now – despite the great advances in medicine, earlier detection methods and increased survival rates for people who have suffered from a serious illness - only 60% of us can expect not to have our premiums hiked up.

“That leaves an astounding 40% of people facing loadings on their insurance – mostly which is down to the insurers’ using any minor health ailment or family association as an excuse to bump up your life insurance premiums and therefore put more money in their pockets.”

The knock on effect, says David, is that more and more people are shying away from taking out life insurance for fear of the high premiums, leaving them and their family financially vulnerable.

David says: “We have many clients who come to us having had a rating imposed on their policy and in most cases they do not have a clue as to why, because the insurance companies do not tell them

“All the client knows is that the price they were originally quoted is not what they are being asked to pay now. In most cases a rating of at least 50% will be imposed, meaning the premium the client was originally quoted has increased by 50% from say £50 per month to £75 per month.”

He explains that the biggest reason why premiums are loaded are either the client’s height and weight; they do not fit with that insurers guidelines; and finally, the clients’ families’ medical history does not fit with the insurers guidelines. Yet simply by using another insurer the customer may not face a loading at all.

David summarises: “These underhand tricks by some of the insurers can only serve to damage their reputations and lose them business. We strive to find out what loadings are placed on to premiums before making a recommendation to the clients and strongly urge consumers to speak to an experienced life insurance broker before signing on the dotted line for life cover.”

BestDealInsurance have now implemented a new system that shows what health condition or family association individual insurers will accept and which they will add loadings for. This enables BestDealInsurance to find their client the right life cover for them, without them paying inflated premiums or having inadequate cover.

Ends

Contact: David Thomson, Chief Executive, bestdealinsurance.co.uk on: 01933 442211, mobile: 07968 797030, email: david@bestdealinsurance.co.uk

Editors’ Notes:

BestDealInsurance researched the market place as to what conditions attracted a premiums loading and what didn’t. They found that the loading depends on the company and not the condition. Here are some examples:

An asthmatic smoker who has no more than 10 cigarettes a day will pay standard rate insurance with one insurer but will face an automatic rating up to 50% from another.

Someone who has just one family member who has or had Motor Neurone Disease faces a rating from one insurer yet will pay standard rates with another.

If you have a family member who has multiple sclerosis, one leading insurer will exclude cover on certain illnesses while another will not.

A customer that had Crohn’s Disease was very heavily rated with one insurer yet was accepted at standard rates with another.

A client sought life insurance after suffering from Angina for 10 years following an Angioplasty. One insurer offered cover with a 300% loading, whereas another loaded his premiums by 150%.

One client who had caught and been successfully treated for malaria a year before applying for life cover received a 200% loading on their premium, despite the fact that they had no ongoing ill effects from the disease. Another insurer accepted the client at standard rates.

About bestdealinsurance.co.uk

Bestdealinsurance.co.uk was launched in March 2003 and is dedicated to ensuring that not only do their customers get the best deal, but that they actually understand in full the terms and conditions of the product that they are buying.

Authorised and regulated by the Financial Services Authority, they are completely independent from the large life insurers so will always offer products on an unbiased basis.