the cost of delay
I’m sure you’ve all thought “Ohh! I need to sort out my life insurance” and then something else more important comes along. Or it may have been your health insurance either way most of the time something else takes priority!
We know we need to sort out our insurance, though it’s a chore, boring and hey we’ve always got time. Quite often though we only start doing something after it’s too late.
Getting ill or having a major health scare can shake us up and gives us the kick up the backside that we need.
We then get the ball rolling and we start filling out the insurance application forms. What we then find is often shocking and can leave us feeling helpless and exposed.
You see there’s a saying that you don’t buy insurance with your money, you buy it with your health. This is very true! It becomes clear when we apply for insurance especially after an illness.
So if you haven’t sorted out your life or health insurance and you keep putting it off, what’s the cost of getting sick?
We Only Start Doing Something After It's Too Late
So we’ve all heard the saying “about as serious as a heart attack”, well if you’ve had one you may feel vulnerable. All of a sudden you feel mortal and want to get things sorted out for you loved ones. So you fill out your insurance application form.
So what are you likely to discover?
Well for starters you’ll find you’re going to pay a loading of at least 225%. This is your best case scenario assuming that you’ve had a good recovery and got things under control. So if the normal premium rate is £100 per month then you’ll be paying £325 for the same amount of life cover.
If you haven’t and things are more complicated then you’re looking at an even bigger loading or a decline. If the loading get to over 300% then this will lead to an automatic decline.
As for health insurance at best you’re looking at a complete exclusion of the cardiovascular system. Though more than likely you’ll be looking at a refusal of cover.
Angioplasty or stent
If you’ve had a diagnosis of atherosclerosis (hardening or Narrowing of the arteries). Then you may have undergone angioplasty or had a stent implanted. It may have spurred you on to sort out your life insurance.
As with the previous example you’ll find that there are some consequences to the delay. Assuming everything’s gone well your maintaining a healthy lifestyle and have no symptoms. Well you’ll be looking at a premium loading of 200%. Again what could have been a £100 monthly premium pre-diagnosis would now be £300.
Again if things aren’t so simple and there are complications then you’ll get a bigger loading. Again if that percentage goes above 300% then you’ll get a decline.
When it comes to health insurance then there’ll be a cardiovascular system exclusion. This is an enormous one making the viability of a policy questionable. If there are complications then your application could be declined.
One of our clients worked for a global cosmetic company in Singapore. He wasn’t interested in health insurance because he had his company plan. What he didn’t realise was that this plan didn’t cover day patient procedures.
He had a diagnosis of atherosclerosis and underwent angioplasty to correct the issue. He tried to organise the procedure through his company plan only to find out it wasn’t covered. It’s a day patient procedure you see. So he had to pay for it himself SGD19,000 and that’s almost 10 years ago.
When he came to us to ask if we could set up a health insurance policy for him it was too late. He applied and they gave him the news. An exclusion of all the cardiovascular system and no reduction in the premium. This made the policy unviable.
a cardiovascular exclusion makes a health insurance's viability questionable
This is a tricky one and much depends on what type, the severity and when they had it. Though whenever we’ve put in an application for a cancer survivor, it wasn’t accepted. We talked to several international insurers whilst researching this article. As of that time not one had a client on risk that had previously suffered with cancer.
Each one said that they would assess every case on an individual basis. Though the fact that I mentioned earlier is a harsh reality. If you’ve had cancer and got through it getting life insurance is going to be a challenge.
As for health insurance it’s a pretty similar story. Whatever you’ve had in the past will result in an exclusion. Though the likelihood is that they won’t accept your application.
We had someone who came to us and wanted advice on setting up some health insurance for when they retire. They were working at the time and had cover through their company scheme. This was going to end when they left the company. They wanted to retire spending some time back in their home country though the bulk of the year would be in Asia. So, they needed health insurance.
We gave them several options to consider and suggested that they should set something up now. The reason for this was that they were both healthy right now. Whilst they weren’t going to retire for the next couple of years, if they set something up now they had cover. They said that they’d rather wait until nearer the time. Unfortunately a year before he was due to retire the husband found that he had cancer. It was treatable through a surgical procedure and some radiation therapy. That was good news though it did mean that he could no longer get health insurance. After he left his company his company cover would end.
Multiple Sclerosis (MS)
The advice given was that a life insurance applicant with MS wasn’t an automatic decline. Again much depends on the severity and the type of MS that the applicant has.
One thing is for sure you’re going to get a loading of at least 200%. Though you can be pretty sure that there are more applications that don’t get accepted than do.
As for health insurance the fact is that you’re not going to get accepted. It doesn’t matter about the severity and type, a health insurer will decline the application. There are too many associated complication that the exclusions are too extensive.
Crohn’s can develop at any age though it most commonly occurs before 30. It has become more common over the past 20 years than it once was. There is no cure though management of the condition through medication is possible. There are fatalities from Crohn’s disease though they are not common.
Due to the fatalities life insurers insist applicants with Crohn’s are medically assessed. If acceptable then there is likely to be a loading though this will depend on the severity of the case. Though it is pretty safe to say that your premium will double. If severe enough the insurer will decline cover.
As for health insurance then Crohn’s won’t lead to an exclusion only a decline. The issue is that symptoms can be quite wide ranging.
much depends on the type, severity and when they had it
Living overseas as an expat can mean you get exposure to some serious air pollution. Prolonged exposure to air pollution can lead to people developing asthma.
If you have asthma and apply for life insurance then you’re going to get a loading of 100%. Though it is rare that you would be subject to a decline for cover.
When it comes to health insurance there’s going to be an exclusion of the respiratory system. That’s a pretty big one!
There are other illnesses and conditions that’ll impact your life insurance application. There are even more that will effect an application for health insurance.
We’re not going to go into them all. Needless to say if you’ve had it’s going to be an issue, especially for medical insurance.
false sense of security
Life insurance is generally medically underwritten, so you know exactly where you stand. This isn’t always the case with health insurance. Many insurers will insure on a moratorium basis as well as well as fully underwritten.
With moratorium underwriting all pre-existing conditions from the past five years get excluded. If there’s no recurrence of symptoms then the insurer could extend cover. You won’t know if you have cover for something until you make a claim. At that point they’ll either honour the claim or refuse to pay. Unfortunately because they have to review the merits of the claim it can slow things down. This isn’t what you want in the case of an emergency. Also if you do have symptoms in those two years you’ll have to wait for another two. The likelihood of you having a chronic condition covered is pretty much zero.
With an underwritten policy there’s a full assessment of your medical history. Any serious pre-existing condition is likely to get an exclusion. Though this isn’t certain and a condition could receive cover straight away. The good thing is that you know what you can claim for before you pay your first premium. This means that when you go to make a claim it gets approval quickly.
Our preference is underwritten because you know exactly where you stand. If you’ve suffered from something a long time ago and had know symptoms you can make a case for cover. In our experience a policy written on a moratorium basis often disappoint. Though there may be circumstances where it would work better for your circumstances.
Not all insurers are equal. Quite often people look towards the local insurance market as a solution. Policies can appear to be cheap and hassle free to set up. Though what are you getting? If you’re paying for something and not getting anything in return then what’s the point of paying. If your insurer hasn’t mentioned exclusions it doesn’t mean there not there.
We knew someone who had taken out a policy with Malaysia’s oldest insurance company. They’d completed the medical questionnaire with complete honesty and in detail.
He stated that his wife had some benign fatty cysts removed from her breasts several years ago. It wasn’t anything uncommon and there had been no further treatment required. They’d had the policy for four or five years when the wife received some devastating news.
She had breast cancer. They went to make a claim on their policy and the insurer declined. They stated that it was a pre-existing condition. Their doctor provided clear evidence that the two had no connection. The insurer still refused and never paid a cent towards here treatment.
not all insurers are equal
It really isn’t unusual for an expat to move from one country to another every 3-5 years. If you don’t have insurance that moves with you then you’re going to have to set up new policies.
As we’ve seen above, a change in your health can have a significant impact on your ability to get insurance. Don’t think that you have a choice in this either. If you keep a domestic policy and keep paying premiums, they’ll keep taking them. They just won’t honour any claims when you or your family make them.
So if you haven’t update your insurance since you became an expat then stop putting it off. Being healthy makes getting insurance much easier and cheaper. None of us know what’s around the corner and it doesn’t matter how fit we appear to be. People still get sick!
If you’re living overseas then international insurance is your best option.
It doesn’t matter whether you plan to move or not there is always a possibility that you could. Having continuity is important and means that you won’t get left high and dry by your insurer.
It’s even more important when we talk about medical insurance. You may need to travel outside your country of residence for treatment at some point. A local policy just won’t let you do that!