Diabetes and Life Cover in the UK - why delaying could end up costing you dearly

Whether you have diabetes or whether you are concerned about the possibility of being diagnosed with diabetes in the future you should take a minute to review your life cover. If you need more than its probably a good idea to act sooner rather than later.

Here's why.

Currently Diabetic? - Once you have started your life cover, the terms (including the premium amounts) are generally guaranteed for the rest of the policy providing that continue to pay your premiums, irrespective of future changes in your health. Delaying taking out cover will generally end up costing you more money when you take out cover at a later date because you will be older. It may also cost you more because of the progress of your diabetes, especially if you develop more complications such as retinopathy, neuropathy or kidney issues. So again arranging your cover now protects you from the effects that future changes are likely to have if you delay. Worse still some future health developments could mean that it becomes impossible to be able to obtain life insurance. One highly relevant example of this would be the future development of any heart issues which is a significant additional risk factor for diabetics. Unfortunately no mainstream insurance companies will offer life cover to any diabetic, type 1 or type 2, who also then goes on to develop a condition such as angina or who has a heart attack. However the life insurance policy terms for those diabetics who arranged their life cover before they developed any heart conditions are still guaranteed, which also means that if death accours as a result of a heart attack you are still covered.

Not Currently Diabetic But Worried About Being Diagnosed With Diabetes In The Future?
You would also be well advised to review your life cover now rather than later. Now you may still be able to obatin life cover at lower premium rates and in the absence of any significant existing health factors there is a good chance that you may be able to so at 'normal' premium rates, which are the cheapest premium rates. Again if you take out the cover now these premium rates are generally guaranateed. If you delay sorting out your cover until you are diagnosed with diabetes, expect to pay higher premiums and in some cases much higher premium rates. Also if you delay until you are diagnosed you should expect to experience difficulty in being able to arrange some other valuable benefits, for example critical illness cover. This could mean for example if the purpose of the life insurance is pay off a mortgage that the option to include insurance to pay off the mortgage if you have a heart attack is simply no longer available to you even though the risk of it happening has increased.

Sainsbury's Shock Report - Is Fear To Blame?

 I have been trying to get my ahead around some statistics that I came across yesterday.

 Sainsbury's commissioned the research looking at how many people in the UK had mortgages with no life cover in place to repay the outstanding balance. The results show some surprisingly big numbers, much bigger than most would perhaps guess.

Firstly the total figure of  mortgages without life cover is given at £245,000,000,000 - thats a quarter of a trillion. But  'billions' and 'trillions' are everyday newspeak terms now, over used by both politicians and news reporters these words have become a sort of TV litter which we therefore tend to ignore as part of the familiar landscape.

Dig a bit deeper into the Sainsbury report figures though and we start to find more meaningful statistics.

The number of people with no life insurance to cover their mortgages? Just under 7 Million, or to put in a more meaningful way  that equals just over 4 in every 10 mortgages. The report goes on to break down this figure between different age bands, as follows

 

Age       Percentage of mortgage holders unprotected
18-24    62%
25-34    38%
35-44    33%
45-54    30%
55-64    55%
65+       58%

Of course within these figures there will be mortgage holders who have valid reasons for not having life cover. The biggest such group will be single people with no dependants - fair enough. Another group might those with significant personal wealth.

But what about all the others? What about the significant majority who are not particularly wealthy but who do have dependent partners and/or families? What about the growing number of older people who find themselves with mortgages much later in life than they had originally anticipated? What are the reasons why these mortgage holders choose to have no life cover?

Here are some of the common reasons people give when asked.

''I've never really thought about it.'' - 

''Its a waste of money - its  (my death) will probably never happen ''

''Its too expensive - I can't afford it''

''No one will insure me with my health conditions''

All of these responses deserve a fuller response which is probably worth addressing in future posts and it would be good to hear readers opinions, so if you have one please comment.

But for the moment I should mention one other factor which I suspect lurks in the background for many and that is fear. Fear is a great inhibitor in all aspects of life. Fear changes our behaviour, it makes us more cautious, it makes us avoid action, fear makes us hide.

Generally people tend to fear the unknown. I am not a professional psychologist but based on my own observations fear is especially to do with a future outcome that is not known. Often the reason why people don't face up to their fears is because they are scared as to what the outcome might be if they do. By avoiding action we feel like we are keeping the possible undesired future outcome at bay. Mostly its a subconcious kind of response.

So how does 'fear' apply to this issue of life cover for mortgages?

Perhaps underneath these figures many people are frightened about the questions they may be asked if they do apply for life cover. Perhaps they are frightened of having to reveal 'embarassing' personal medical information about themselves.

Or perhaps they fear the final outcome  - the fear that if they apply they they might get turned down and  all that that might mean. For example it could confirm their own worst fears that they are going to die sooner rather than later, or in some way mark their financial credit record making it more difficult for them to borrow money in the future if they applied for a loan or mortgage. So some people might choose to avoid applying for life cover in order to avoid some sort of final judgement which they fear might finally mark their cards for good.

But of course fearing something does not mean that it is going to happen.

The problem is that many people are needlessly putting their families at risk by continuing to take no action. Put bluntly if you have no life cover for your mortgage on your family home then your home is at risk.  If you have a family you owe it to your family to seek the appropriate life insurance in order to protect the family home for them. 

Of course this for many will involve confronting a fear of the unknown. 

But if only people with such fears knew where to look they might be quite surprised at the outcome. Here at www.moneysworth.co.uk we offer a specialist service for people with pre existing health conditions who are seeking life cover, for mortgages or for family protection (for other reasons too). Our service is confidential and non judgemental. We have over a number of years developed and refined a process which is designed to help customers find best outcomes. Each case is indivually researched. Further more our service is fee free to our customers and is with no obligation. Therefore it costs nothing to try.

The results are very encouraging. It should be said that we are not able to offer all customers a 100% guarantee that we will be able to find the life cover that they seek but we are able to help the majority, many of whom have been turned down elsewhere before coming to us. Very often the premiums acheived are considerably less than the customer originally feared.

Customers frequently express a high level of satisfaction with our service and often say that a great weight has been lifted for them. With the peace of mind knowing that their dependants are now protected they no longer need to live in fear. 

  

Business Owners - A Key Catastrophe To Avoid

A few years ago a bad thing happened.

We received a telephone call from a potential new client asking to cancel our appointment with him and his business partner because his business partner had died suddenly the day before. The purpose of the meeting had been to arrange some life cover for each of the two business partners so that if either of them died the other would be provided with enough money to buy out the other's shares in the business.

However shocking the sudden loss of a close friend and business partner was, the troubles didn't end there.

The family of the dead partner had never had any involvement in the day to day running of the business but of course they had depended upon the business for their income. What were they going to do now?

The two business owners had been skilled professional engineers and been responsible between them for most of the business reveue. With only one fee earner remaining the business faced significantly lower revenue meaning that the business could not continue to fund at the same level both sets of income - something would have to give.

How did this story end?

The remaining shareholder who was in his late 50's and had been hoping to retire in a few years was forced to remortgage his own home to provide the capital necessary to buy out his ex business partner's shares - putting up his own home as security was the only way he could raise the necessary required funds. Big change for him then and for his own family.

Here's a thought - what if I said this man was lucky! How could that be? Surely he was unlucky?

Well obviously he was unlucky because he hadn't put a robust disaster recovery plan into place in time and it ended up personally costing a him a fortune in added debt, delaying his retirement by years and putting himself, his family and his home at risk. The cost of the insurance premiums necessary to prevent this personal calamity would have been a fraction of what he ended up having to pay.

And the lucky bit? Well this all happened a few years ago at a time when he was able to raise sufficient extra equity from his property to finance the share purchase.

It could have been much worse - it could have happened now.

Because as we all know - right now persuading banks to lend money is a completely different proposition compared to a few years ago and likely to be even more difficult when the bank learns that the business has just lost a key person who was a responsible for a earning a significant proportion of business revenue. Put bluntly for a great many business owners the answer right now is going to be no.

And then what? A forced sale to a third party perhaps?

If you a have any concerns about protecting your business and your assets why not contact us at Moneysworth 0845 430 5200. We can help you take back control and make a plan to insure against the huge costs and risks of this future potential catastrophe for your own business.