Last week we looked at how LV= increased the non-medical limits on their income protection plans. As we re-enter lockdown and the vaccine rollout programme starts we are sure to feel the effect of an overstretched NHS in the provision of medical evidence for protection sales so any provider changes that make putting cases on risk faster and easier is to be welcomed. In this insight we take a look at how the LV= changes compare in the market

The underwriting limits set by insurers highlight the point at which they will request different medical evidence based on the life assured’s age and the sum assured and in general older clients and higher sums assured are more likely to trigger the need for medical evidence. So where a client that falls into one or both of these categories, the provider’s guidelines are particularly useful to understand what medical evidence will be required in order to set client expectations pre-application. Insurers will generally band the limits across age ranges so that, for example, people aged between 31 and 40 would have one set of limits whilst people aged between 41 and 50 will have a different, and possibly lower, set of limits. The exceptions to this are British Friendly, Cirencester Friendly and Holloway Friendly who do not provide non-medical underwriting limits.  

Whilst these documents are quite straightforward and easy to understand, insurers can use differing age bases when setting the limits; “age attained” or “age next birthday”. Advisers should be aware of how each insurer operates, particularly if the client falls into the upper limit of an age band (usually ages 30, 40, 50 and 60). This is important because if an insurer uses an “age next birthday” age basis then a 40-year-old would fall into the 41 to 50 age band, however for insurers that use an “age attained” age basis this client would fall into the 31 to 40 age band and therefore the underwriting limits may be completely different. 

The graph below highlights the monthly benefit level at which any medical evidence would be requested based on 18, 28, 38, 48 and 58-year-old applicants. We have used these ages as they will generally fall into the middle of insurer age bands and as such are more reflective where certain insurers use a 35-40 age band compared to another that might use 36-41. This graph reflects the new non-medical limits introduced by LV= last week

* Cirencester Friendly do not automatically request any medical evidence for clients aged 39 and below

** Cirencester Friendly’s Income Assured Enhanced works on units of cover and a tele-interview will be requested if a client has 34 units of cover or more (aged 40-50) and 24 units of cover or more (aged 51 & over)

*** The Exeter do not automatically request medical evidence for clients under the age of 42 and will automatically request a GPR for all clients over the age of 55 regardless of benefit level

NB: British Friendly and Holloway Friendly do not apply automatic limits for medical evidence

There are generally three ways that medical evidence can be obtained:

  • A Nurses Medical
  • A General Practitioners Report
  • A Doctors Medical

The next most often requested form of medical evidence is a mini or nurses medical. Generally these include basic medical tests, along with a cotinine if the client is a non-smoker, and any additional blood tests that may be required. In most cases the nurse will visit the client in order to carry out the medical, but in the current environment this may be difficult especially if the client has symptoms of COVID-19 or is in self isolation. The chart below shows the monthly benefit level at which mini / nurses medicals wilb be requested

*The Exeter would request a GPR before a nurses medical for clients between the age of 41-50 and would request a doctors medical instead of a mini/nurses medical for clients over the age of 51

*The Exeter do not automatically request medical evidence for clients under the age of 42

As benefit levels increase an insurer may ask for a General Practitioners Report. The use of electronic reports (e-GPRs) is on the increase and are clearly much easier but in a large number of cases GPs continue to take a manual approach, meaning the return of a GPR can take weeks and in some cases months as surgeries continue to be stretched dealing with the pandemic. For younger clients, the high benefit levels at which a GPR will be automatically requested means that very few will be needed unless there is some kind of disclosure on the application. At older ages, the benefit level required to trigger a GPR request is far lower and as such this is more likely for those with relatively high benefit levels:

* AIG will not automatically request a GPR

** Cirencester require a telemedical at this benefit level and do not automatically request other medical evidence

*** The Exeter do not automatically request medical evidence for clients under the age of 42

**** The Exeter will automatically request a GPR for all clients over the age of 55

Should a Doctor’s Medical Exam be required, the time and location is more likely to be dependent on the doctor and as such will be more restrictive. In most cases insurers allow the client’s own GP to complete the exam which may be preferable for some clients. Interesting neither AIG or L&G will automatically request a doctors examination at any sum assured, and neither do The Exeter for clients under the age of 42

* AIG & L&G will not automatically request a doctors medical

** The Exeter do not automatically request medical evidence for clients under the age of 42

The world we live in has changed immeasurably over the last 12 months but if there is any positive to take away it is that the pandemic, and especially the furlough scheme, has opened many consumers eyes to the benefits of income protection, removing the oft cited objection that “it won’t happen to me”. The irony is that as more customers see the need to protect their income against the unexpected, the medical evidence required to underwrite cases has become more difficult to obtain, a symptom of the same pandemic that drove the clients’ decision to buy in the first place. So it is important that advisers understand the benefit levels at which medical evidence will be requested as in the current environment any medical evidence is likely to take longer to obtain and extend the time it takes to put a policy in force.

Overall,  AIG, Legal & General and LV= have the highest limits before any medical evidence is required for clients aged 38 and under, with AIG offering the highest limits to anyone post age 40, so applications have a higher chance of going through before triggering a requirement. For GPRs, LV= have the highest limits but it’s worth noting that AIG do not auto-request a GPR based on sum assured limits alone.  LV= also has the highest limit before which a Doctor’s medical is required and also of note are AIG and Legal & General who will not automatically request one either (nor do The Exeter for clients under the age of 42).