Putting a policy on risk quickly can often be the difference between a NTU and in force policy. So what can be done to minimise delays when medical evidence is needed? Having a good understanding of what will trigger requests for such evidence can make a difference and, if all else is equal in terms of price and quality of products, could be a factor in which is selected. This study identifies what to expect from different insurers.
Unlike life protection where the medical underwriting limits are relatively high, critical illness plans have lower thresholds and therefore underwriting is more likely to be a factor. Advisers that understand when medical evidence may be requested are better prepared to manage the client experience but how do insurers differ?
As with life protection, there are two different age basis that could be used, age attained (current age) or age next birthday (current age plus 1).
If advisers are looking to compare two insurers, then it is particularly important to understand the age basis each insurer uses. For example, a client aged 40 would fall into the age 36-40 bracket for an insurer that uses age attained and the 41-45 bracket for insurers that use age next birthday. Whilst most insurers use the age next birthday for underwriting limits a smaller number use age attained.
For applications where the policy includes both life and critical illness, critical illness underwriting limits will apply. In such scenarios, advisers may consider making applications to insurers that have high non-medical underwriting limits so the client is not inconvenienced.
Perhaps the most important measure is understanding at which point any medical evidence would be requested. Overall the limits for critical illness are approximately a third lower than the limit for life only plans:
- At aged 30 the limit at which medical evidence would be requested for critical illness plans ranges between £400,001 and £500,001 compared to £750,001 and £800,001 for life only.
- For age 40 this decreases to between £350,001 and £480,001 for critical illness compared to £500,001 and £750,001 for life only.
- At age 50 this further reduces to between £150,001 and £300,001 for critical illness and £300,001 and £500,001 for life cover;
- Age 60 is between £50,001 and £150,001 for critical illness and £100,001 and £300,001 for life.
The graph below highlights the sum assured at which medical evidence would be requested based on 30, 40, 50 and 60 year old applicants for critical illness.
Once the underwriting limits are breeched, the type of medical evidence required will depend on the age of the client with younger clients more likely to be asked for a medical first and older clients a General Practitioners report.
A General Practitioners report can take some considerable time to be completed and returned. A GP surgery can be more difficult for the adviser to chase and therefore the timescale of returning these is largely out of their hands.
AIG and Old Mutual Wealth will not request a GPR based on the life assured’s age or the sum assured. Whilst they do not rule out requesting a GPR altogether, this could be seen as a positive for an adviser and for the client.
Although advisers may have no control over how long a GPR takes to be returned to the insurer, from a client’s point of view this is less intrusive on their day to day life than a Nurses or Mini Medical might be. Knowing when a Nurses or Mini medical is required before an application is made can go some way in reassuring the client on what is to be expected when applying for a plan.
A Nurses/Mini Medical (or screening) is generally not as intensive as a full Doctors Medical examination and can be organised by your client at a time that suits them. These will usually involve a cotinine (smokers) test as a standard for non-smoking clients.
The providers underwriting limits will dictate when a Nurses or Mini medical is required as per the graph above.
Being able to get a critical illness policy on risk without the need for medical underwriting makes life easier for the adviser and more importantly for the client. It stands to reason that the younger a client is, the higher the limits will be for automatic medical underwriting and as such most younger clients are unlikely to breach these. Older clients, however, will often require higher levels of protection and as such the lower limits placed on them is more likely to be a factor. In any event, advisers should be aware of when automatic medical underwriting may be required in order to prepare their clients.
Overall, Old Mutual has the highest limits before medical evidence is required and do not automatically request a GPR, along with AIG, regardless of the sum assured. LV= hold the highest rates available overall before triggering a requirement for a Nurses or Mini medical.