Critical Illness Heaven

Four years ago when James Halliday was told he had a brain tumour, life was wouldn’t ever be the same again but following a traumatic operation his recovery has been excellect. However he lives with the thought that the tumour could re-occur at any time in the next ten years. He will also have to take tablets to reduce his epilepsy for the rest of his life.

Mr Halliday, who is now forty one, thinks he is the “luckiest man alive” to have come through it. However he is no longer able to get life insurance.

Mr Halliday and his partner have a 4 year old son, Ethan, and a year ago they moved from Manchester to Bramhall in Greater Manchester. The family remortgaged £85,000 with the Abbey National but James was unable to protect the debt with life assurance cover in his name.

“The Lloyds TSB’s underwriters would not give me life assurance. My wife, Sheila, has critical illness insurance (CIC protection) and life assurance cover for the whole mortgage,” he says.

The possibility of getting life assurance are extremely unpromising if a request is put forward in the first two years of succumbing to a dangerous form of cancer or having had a heart attack. Should the patient make a complete recovery within a set period, typically between three to five years, insurers will consider covering them again but might put a “loading” on to the rates. In lots of situations this could be as much as 8 times the premium that other healthy people pay.

During the first four years following an operation, someboby in James’s situation would be refused cover. After this set period, life cover should be easy to get “but at a highly priced premium” and cheap cic insurance protection will be almost impossible.

The life insurance company which underwrites for high-risk clients (those people who play hazardous sports or with serious medical problems is the Special Risks Services. It claims to have a achievement rate of 75 per cent when putting its clients with insurance companies. Special Risks Services declared that it will be a further year before they may be able consider an application from Mr Halliday. Rates would definitely be steep because of his epilepsy and because there would still be an increased mortality risk compared to the general population. Unless a policy purposely excluded cancers, James will without doubt be refused any critical illness insurance cover.

Therefore as a result of independent financial advice, the Halliday family has saved up 8 months emergency money and put it to one side, effectively a self-insurance cover.

And there is a bit of good news for James. Allied Irish, his previous mortgage provider, has permitted him to keep fifty-five thounds pounds of life life insurance from an existing policy – although at a cost of 50 pounds a month. This type of policy is called a Guaranteed Insurability Option and means the insurers will allow the insured up to half of the original amount assured without underwriting.

It is not just severe medical complaints that can influence  life assurance. Simon Harris, chairman of Malvern Sports Club had his first application declined because of a minor illness. Numerous trips to doctors and no end of phone calls to Scot Prov they  sorted things out. Mr Harris’s counsel to anyone in the same boat is to make an application first and assist it with a full medical report.

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