3 things to understand about underwriting – ip awareness week day 3
In the third series of our dedicated income protection content to coincide with IPTF’s IP Awareness week, we bring you three insights focusing on underwriting.
Given the risks being covered, income protection plans can sometimes have the strictest underwriting criteria of any type of protection policy. Because in many cases the likelihood of a claim arising on an income protection plan, compared to say a life policy is much greater, insurers need to properly assess the client’s health and lifestyle, to understand the risk they’re taking on. Where higher sums-assured are being requested, or the client is older, insurers may ask for additional medical evidence automatically, regardless of disclosures. Whilst an application is being assessed the client has no cover, so some insurers offer a degree of protection at this time in the form of free cover. For those client’s living with medical conditions already, such as diabetes, the process may be more drawn out as medical evidence is sought, if they can even obtain cover in the first place.
We’ll be bringing you a range of insights each day, focusing on different aspects of the income protection journey, so look out for tomorrow’s round-up which will focus on policy flexibility and mid-term changes.
NON-MEDICAL UNDERWRITING LIMITS FOR INCOME PROTECTION – HOW INSURERS COMPARE
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. It should be stated of course that additional medical evidence may be requested regardless of the applicants age or the sum assured, if medical disclosures are made during the application that require further information. In this insight we look at the automatic underwriting limits on income protection.
WHO PROVIDES IMMEDIATE INCOME PROTECTION COVER DURING APPLICATION UNDERWRITING?
I’m sure if I asked advisers what their biggest frustrations are when it comes to applying for protection insurance, underwriting delays caused by GP reports or other medical evidence would land fairly high on the list. Free cover, which is included by most insurers on their life cover, but is less common on income protection, whilst not resolving the problem of underwriting delays, does go some way to ensuring clients are protected whilst their application is being assessed. In this insight we look at which insurers offer free cover on income protection plans and how they compare.
WHAT PROTECTION INSURANCE OPTIONS ARE AVAILABLE FOR CLIENTS WITH DIABETES?
With more people than ever now living with diabetes, many advisers will be dealing with clients who have this condition at the time of seeking advice. Access to protection solutions for this living with diabetes can be more limited, so it’s helpful for advisers to understand what impact this condition can have on access to insurance. In this insight, to mark Diabetes Week, we looked at which insurers provide cover to people living with diabetes and what terms might be offered.
