Kathryn:       Hi everyone, today I have Alan Knowles with me from Cura.  Hi Alan!

Alan:           Hi Kathryn, hi everyone!

Kathryn:       We are going to be talking through a number of quirky cases just to give a kind of crash course on high risk insurance options.  This is going to be the first of a few episodes where we’ll have Alan on doing sort of like a bit of a run through masterclass of what you can do for getting things and today will be a focus upon life insurance.  So this is the Practical Protection podcast.  So Alan, I’m going to ask you how your weekend’s gone.  It’s a bit of a strange one actually because usually I don’t know what the other person’s been up to but seeing as though we are together in lockdown, I kind of know everything that you’re doing!  So just tell everybody else.  How have you been?

Alan:           I’ve been very good, thank you.  This is where I really surprise you and you find out I’ve been doing all these things that you’ve got no idea what I’ve actually been doing and I have this secret life.  I’m really not that exciting!  So – well I mean officially Kathryn and I are both on leave this week and this is obviously how we spend our leave but we were supposed to be –

Kathryn:       Bank Holiday Monday.

Alan:           Yeah, we were supposed to be in Centre Parcs this week but we sort of ummed and aahed it for a long time.  Due to some of the restrictions on the swimming pool and everything, we decided actually we weren’t going to go and instead we thought, well we’ll just have a week at home with the kids with the exception of this – obviously this podcast.  So on Saturday I took our six-year old to his first ever football match, as in he was actually playing in a football match and he’s only been to about three training sessions, bless him, beforehand so he didn’t really know exactly what he was doing but he got stuck in and tried but within about 10 to 20 seconds of being on the pitch, he actually defended a goal but he did this by taking a hard ball to the chest when one of the other team kicked it at the goal.  So he stopped it going in the goal which was brilliant but then he was pretty petrified of the ball for the rest of the match when he was playing, bless him.

Kathryn:       Yeah.

Alan:           What else have we been doing?  We’ve watched the Guardians of the Galaxy films with the kids, we’ve made pizza and I’ve been roped into playing Minecraft and Roblox.  Roblox?  Roblox?  I don’t even know the name of it.  Whoever’s got – if you’ve got kids who like Minecraft, chances are you probably know what Roblox is.  If not, it’s something like Minecraft and I couldn’t really tell you the difference.  We’ve been to the beach this morning and I’ve volunteered myself to take the kids camping in the garden tonight so it’s probably the ultimate staycation at the moment, staying at home in the back garden.

Kathryn:       Absolutely.  I was going to say I’m very, very thrilled that you’re the one that’ll be camping with them ‘cos I’m not a camper.  So –

Alan:           It’s alright, you can have Zachary the three-year old – that’s definitely the harder task.

Kathryn:       That’s fine by me.  So usually on these episodes we have a truth or lie feature and you’ve got a little bit in on this one which is a bit unfair really for listeners, but last time, Lindsay and me were talking about our office nicknames.  Now Lindsay said that her office nickname is Tigger and I said that mine is Cake Tin and as I say, you’re cheating on this one so would you actually like to do the reveal this time, as to which one is right and which one is a lie?

Alan:           This will be quite embarrassing if I get it wrong won’t it, on this?

Kathryn:       Yes.

Alan:           So obviously for this one, I know the right answer and the person telling the truth is Lindsay with Tigger because – we call her Tigger because she bounces around the office.  She’s got so much energy and she just bounces around.  Tigger by the way from Winnie the Pooh, I’m sure everybody knows that but, you know, The Wonderful Thing about Tiggers, so I’ll let everyone just imagine that one.

Kathryn:       Absolutely, absolutely and just for anyone who’s interested and listening, I have been nicknamed The Dragon in the office which I’m actually pretty, pretty proud of.  Anyway, so there’s quite a few things we’re going to be chatting about in this episode Alan, but I think we’ve got quite a lot of stuff so we’re not going to be kind of – sort of like nattering too much, we’re just going to get really down to business with things.  So I think a lot of people and most of our listeners are going to see you as a leader within our industry when it comes to specialist protection advice.  You are also the chair of the PDG and have recently become an executive of the Income Protection Taskforce and the first thing we’re going to do is focus upon some case studies that you have from Cura and what you do in a sense to really show what is possible when it comes to insurances and sometimes the different steps that advisers can possibly take to get that insurance with somebody and sort of like on fair and reasonable terms.  So would you like to kick off with your first case study please?

Alan:           Yeah sure.  I feel a bit of pressure now actually, listing all those things and so I’ve got a few case studies so – I tell you what, if I just – I’ll go into the first one and then yeah, I guess you’ll just shout at me Kathryn, if you’ve any questions or if you want me to shut up.

Kathryn:       Absolutely.

Alan:           So –

Kathryn:       I was going to say, why not change – we may as well not change from our usual lifestyle anyway so I’ll just shout at you at some point.

Alan:           See this is – yeah, this is the husband and wife thing really coming out now.

Kathryn:       Husband and wife episode, we’ll just get our own spin-off series.  Sorry yeah, go ahead.  So first – I believe the first person you were speaking about is potentially a cancer case study, is that right?

Alan:           It is indeed.  So yeah, so – but I want to talk a little bit about a female client.  So she was a non-smoker, she was in her mid-30s and she’d had a condition called ALL which is acute lymphoblastic leukaemia.  So I’ll just explain, that is a form of blood cancer.  Obviously I won’t go into sort of too much detail on that but she’d had this condition 15 years ago and now a lot of the time when we see people with acute leukaemias they’re usually very, very young when they had this.  Obviously she would have been 20 which, you know, for – I guess for some of the clients we see, is a bit older.  So she had this 15 years ago.  She very unfortunately had a relapse though after her first lot of treatment and this was 13 years ago.  So the total treatment that she had was radiotherapy, chemotherapy and she also had a bone marrow transplant.  Now, all of this had been finished around about 12 to 13 years ago so she’d now been completely free and in remission for obviously a number of years.

Now, actually arranging cover for someone who’s had leukaemia is quite often possible but obviously once you’re throwing that relapse into it, it did cause most insurers to actually decline to offer any life insurance for her.  I’m pleased to say we were able to arrange her some life insurance but basically we applied for life insurance only because, yeah, there’s usually – a bit of a strange one actually for me and I’m sure someone will be able to tell me a reason actually for this one – but it’s one of the ones I’m not sure.  But actually for critical illness, usually when we’re looking at an acute leukaemia, you’ve usually got to be free of the condition for 20 years before you can actually look at critical illness with most insurers.  But anyway, for life insurance for this lady, we applied just for the life cover.  Now, obviously with something like this they tend to write out to the customer’s doctor – as an insurance company you write out to the customer’s doctor and get full information from them.  Now, this happened with this lady.  The problem is the doctor took an absolute age.  They had an absolute nightmare trying to get the report back and it was one of these where actually, rather than taking weeks, it was stretching into months to actually get all the medical information back.

Very sadly, during this time, as if she hadn’t already been through enough, this lady was diagnosed with breast cancer and this is before we actually started the policy so this was whilst we were waiting for that GPR back from the insurer.  Now, the customer contacted us, obviously she was really upset.  She was, you know, she’d been through this twice before, you know, let alone to have to go through it again all these years later.  But actually the insurer that we had chosen for this policy for her didn’t require further disclosure of information and for any brokers who are listening and advisers who are listening, there are a couple who will do this.  So if you don’t know about this, it’s worth checking because had we have gone to an insurer on this one where they required ongoing disclosure throughout the application, she would have just had that offer pulled.  She wouldn’t have been able to still buy the life insurance but because we didn’t need to tell the insurer about the breast cancer that had just been diagnosed – and we did double check this with them as well, they said they didn’t need to know, they were able to continue underwriting the policy and actually offer her the cover.

So this lady was actually offered cover.  We did her £100,000 worth of decreasing life insurance for her mortgage and we did her £100,000 worth of level term life insurance just for extra family protection until the age of 70.  The decreasing life insurance came back at £7 per month and the level term insurance at £14 per month.  So she got her overall life insurance for £21 per month and believe it or not, actually those prices included what we call a 100% loading, so effectively premiums were nearly double what they should have been which really I don’t think was bad, you know, I think that was a really, really good offer and obviously considering her diagnosis during the application, it was quite incredible really.

Kathryn:       I think that’s something that really stands out and I’m sure I’ve mentioned this in a previous episode as well, is that, you know, sometimes we see these things and it can be, you know, people who are applying themselves, it could be other advisers, it could be paraplanners, anybody – and you see something like leukaemia, you see that there’s been a couple of relapses, you then find out that there’s a current thing – sort of like a new diagnosis of breast cancer and each thing that’s adding up, you know, you do kind of have that instinct of thinking, “Okay, this may not be the easiest route,” or, “Okay, there is going to be terms here that are going to be silly prices,” or even if they are available.  And I think it really, really stands out on this one as well, just the fact that there can be a premium increase but it doesn’t mean that it’s going to be a silly price, you know, it may still be well within the affordability of the person who is applying for it.  £21 per month isn’t, you know, for quite a lot of – for some people obviously that is too much, you know, they would need it to be much cheaper but for probably a lot of people £21 per month for that life insurance is quite a feasible amount and I appreciate that some people won’t like the fact that there was a premium increase there depending upon the situations that they have themselves but it’s, you know, with all of that stuff that was going on, we still managed to get the life insurance for £21 per month which I think is brilliant.

And I think something that’s quite interesting and I’ve mentioned this before Alan, and maybe you can help sort of like describe some of it which does become quite technical.  So when it comes to things like the premium loading it can be something like – you often see maybe something like 50% or 100% premium loading and I do this with my team when I’m training sort of new advisers.  I know it was something that I actually really struggled to get my head around when I was first starting to look at advising is that if you have a 50% loading then you have to take that premium – the original premium and times it by 1.5.  If it’s 100% loading, you take the original premium and you actually times it by two because the premium itself is in a sense 100%.  So if you’ve got it by another 100% then that’s it timesed by two and then if it’s 200% loading, you have to times that original premium by three and it can get a little bit confusing sometimes I think and then when you get into ones that aren’t like your standard 50 or 100 or 200% loadings that can make it even more confusing.

But I know obviously with a lot of cancers and other situations, maybe like especially to do with sports and things like that, there is thing known as a per mille and I know obviously quite a lot of our listeners are probably very, very aware of that kind of a rating but Alan, can you sort of just like take it in a sense back to basics as to what a per mille is and then hopefully that will just – as well probably for myself as well, again just clarify in my head as to how it’s actually all calculated out.

Alan:           Yeah sure, so basically – yeah, you’ve just explained what a percentage increase is so a percentage increase is probably the most common that we see and that’s applied to most medical conditions so anything from a high BMI to a heart condition to arthritis, you know, any – most medical conditions will result in a premium increase and it’s pretty easy to work out because roughly you can double the premium, triple the premium etcetera.  If you go to a per mille on the other hand, this is the other way that usually we will see premiums increase – instead of being charged based on the premium and we say doubling or tripling – what the insurer will do is they’ll apply an extra premium for every £1,000 worth of cover that you purchase.  So that’s where the per mille basically part comes in, meaning per every thousand – every thousand.  So if I give an example with this, if somebody was charged £5 per mille on a premium, they would be paying an extra £5 per year for every £1,000 worth of cover they buy.  So if you buy £100,000 worth of cover, you’ve got 100 times five which is £500 per year is your extra premium.  Work that out monthly, it’s roughly £40 per month.

Now I guess, you know, you’ve already said, you know, with this it’s usually applied to people who’ve had cancer, it’s usually applied to sports – hazardous sports activities, sometimes to foreign travel but also to certain medical conditions – it has done in the past.  Probably the big one where we see it is more recent suicide attempts or suicidal thoughts etcetera, they can also apply that sort of a premium increase to.  Interestingly I guess, it can work out better or worse depending on how old you are.  If you’re a younger life, typically a percentage increase is going to be better because if your premium’s £5 for, I don’t know, £200,000 worth of cover, doubling your premium goes to £10 a month which is nothing.  If you get a decent per mille loading on that, your premium could go from £5 up to £50, £60, even £100 per month because it’s based on the cover that you’re buying and conversely that works the opposite if you’re an older life as well.  So you typically would find then a per mille might work out a bit cheaper for an older life.  It’s not an exact science but that’s the general sort of theory of it.

Kathryn:       Okay, thank you.  And so – so we chatted about that one and do you have another case study then?  I know you’ve got a few to chat through.

Alan:           I do indeed, I do.  So another medical condition next.  So interestingly this one was sent to us through an IFA who couldn’t place this client ‘cos – well at least not at any premium that the client was happy to pay.  So we had a customer in his late 30s.  He was a non-smoker and he had been diagnosed 15 years ago with a condition called IgA nephropathy.  Now it’s basically a kidney condition which causes damage to sort of the small filters around the kidneys and we’re going to wait for a flood of emails from underwriters and claims people –

Kathryn:       Underwriters saying –

Alan:           “No, that’s not what it is.”

Kathryn:       “That’s not what it is, Alan.  You simplified it too much, Alan.”

Alan:           But basically, you know, it’s quite a serious kidney condition.  Now very sadly 10 years ago, his kidneys did actually fail him.  He is very lucky, his loving mother donated a kidney to him and, you know, he now lives a life with three kidneys albeit two of them aren’t actually in use and, you know, all is obviously put on the one kidney and we do find that insurers much tend – well tend to much prefer seeing a transplant from a living relative rather than for example from a deceased donor because the chance of rejection is much lower when it’s from a living relative.  And the good news is, he is fine and he made a full recovery as did his mother as well.  Now, as with many of our cases, most insurers did decline or would decline cover for him.  He’d had one quote from a specialist insurer but it was hundreds of pounds per month.  It was just far too much.  This was actually, you know, one of the examples where a per mille loading was being applied and just made it very, very expensive for the client.  This client – sorry I did forget to mention actually he did have a complication as well so it wasn’t quite straightforward.  All was fine up until just shy of a year ago, so about 10 months ago he had a CMV virus which is a cytomegalovirus – if you could see my face, I was pulling a bit of a face then when I was saying that – trying to think – making sure I got that one right.  My understanding is that this can be a higher risk for people who have had transplants.  He was fine though and he did make a full recovery from that virus.

But yeah, so the one quote he had had was from a specialist which was very, very expensive.  Now we were able to actually do this with a percentage loading instead of a per mille so basically 150% increase on his basic premiums it worked out at and for him that was £215,000 worth of level term life insurance so a policy that would pay £215,000 if he passed away and that’s over the next 11 years and that was £33 per month.  Now obviously the premium on that I think – all things taken into account was absolutely fantastic.  The only thing that I was disappointed with with this one was the term cap.  So 11 years is half the length of the mortgage that this person’s got.  Really we needed this over well 20, 25 years but because of when the organ transplant was, the insurer was only willing to offer 11 years to us on this one.  But from our perspective, it was cover, it was, you know, affordable and actually something that we will go back and do regular reviews on.  So if we can get something better for him in the future, then of course absolutely we are going to do that.

Kathryn:       Yeah, I was going to say – another thing I think from that for me, picking up on that as an adviser and something is that sometimes you have to adapt things.  Like you’re saying there, ideally we’d have had double the length of term but obviously that wasn’t going to be available.  It was kind of as if we’ve had to do a bit of a compromise.  Everybody’s had to compromise on the rating.  So like he could have had potentially something that would cover his whole mortgage but the price of it – I mean I think you were into hundreds of pounds per month and it was just not affordable for him and, you know, sometimes you just have to go with what is actually available at that time and as long as the client is obviously aware of what’s available and they understand, you know, and you go through it very clearly with them to say, “Look, this is what is going to happen.  This is the term.  Ideally –”, you know, still say to them, “Ideally, in a sense, in an ideal world you would take this one over here that covers the full mortgage term and it is hundreds of pounds per month but we also have to be realistic about what is actually going to be affordable for you and what you feel comfortable paying for as well.”

You know, I think there’s got to be sometimes – I think it’s that whole thing, there’s not always an ideal world situation when it comes to insurances but there are options and there are ways to sort of change and alter the policies that you are recommending and offering and as long as you give the client all the options, you know, even if something is seeming like it’s like ridiculous money, if you give that option to them and you also give them another option then you are giving them that choice.  It’s not that you’re automatically – you’re not assuming that they can’t afford something.  You’re not assuming that you’re making the best option for them.  You just need to make sure that you’ve made them fully aware of all the options that sit in front of them.  And I believe you have another case study for us?

Alan:           I do indeed.  I’m going to move away from the health conditions this time so we were contacted by a customer who was due to go and work in Libya providing some support to their police system.  Now, anyone who’s ever had sort of customers who picked up a new job and they’re going to go and work somewhere sort of overseas etcetera, you tend to find they ring you a few days before they’re due to go so it’s always time is of the essence.  We do cover sometimes for people who work in Iraq and Afghanistan and you can guarantee they’ll ring you the day before they’re due to hop on a plane so my only ask would be if anyone ever does listen to this, is give us a little bit more time ideally with it but we’re used to it.

So this customer was due to go in the next few days to a week basically so he’d given us a little bit of time which was good.  Now, he’d been told almost everywhere that he couldn’t get life insurance due to his travel even though he was a UK resident, he was a UK taxpayer and he would continue to be a UK taxpayer.  He had one other company quoted but it was life insurance only and the price was very, very high.  On this one, I’m pleased to say that we were able to source him £250,000 worth of life insurance over 20 years for £22 per month which obviously was very, very cheap considering he was due to go and work in Libya.  We were able to do him a short-term income protection policy ‘cos he was still going to be a UK taxpayer – £2,500 per month this would pay if he couldn’t work for more than 13 weeks and this would pay him for up to two years if he couldn’t do his own occupation and that was a little over £50 per month and we also did him a little bit of accident cover as well.  So basically through his work, they actually gave him some accidental injury cover in case he got injured whilst he was out there but obviously he didn’t have that same cover in at home so we were able to offer some fracture cover, some accidental injury cover, some hospitalisation benefit that covered him while he was in the UK as well.

You know, ideally this is – you talk about compromises, this is another one.  I would have loved to have had some critical illness in there for him.  Interestingly, I could have done him some critical illness cover but it wouldn’t have been one of your standard UK providers, it would have been extremely expensive and to be honest it was just far, far outside of his budget.  I’d have also loved to have done him a long-term income protection policy but due to the travel and where he was going, this isn’t something that the insurer was willing to take on so, you know, it was a bit of a compromise and something again we’ll review for him because he was, you know – a sort of a one-off contract doing this.  If his job changes and he’s not working in Libya next time, we might then be able to review that and get a different policy, look at the critical illness, look at a longer term IP.  So for me, these sorts of cases – and obviously any case but these especially show the value of keeping in touch with your customers and talking about these changes and where they’re due to go.  Of course, it might be the opposite and he might end up working in Iraq or Afghanistan or somewhere that’s even harder to place so we might not be able to do anything but it’s important for us then as advisers just to make sure that we do keep in touch.

Kathryn:       Absolutely and I think the interesting one there for me as well as the income protection side of things.  Sort of like again, adapting the way the advice goes depending upon the situation but we are going to do a very specific income protection episode with you so you can show us like all the different ways you can kind of tweak things and sort of like play about with like different aspects of an income protection policy because I think you’ve always said from – you said this to me for years, that you find that the most flexible policy type that you can possibly do is income protection just because there are that many different options that can be looked at.

Alan:           Oh definitely.  What other policy can you go for, you know, a long-term claim, a five-year claim, a three-year claim, a two-year claim, you know, different deferment periods, different benefit levels, you’ve got more insurers than you have on the term side.  It’s an incredible policy.

Kathryn:       Yeah, and obviously I think as well, it’s so, so key right now ‘cos I think we all experienced this – many of us as advisers experienced this since coronavirus and everything, that people just are swarming and wanting income protection.  I think it’s really hit home to people and I’m hopeful that it will be something that carries on sort of like being of interest to people and – do you have any more case studies?  I think you’ve another one, another two, I’m not sure, I can’t remember.

Alan:           I’ve got two if you spare me the time for them.

Kathryn:       Oh go on then, I’ll let you if you make me a cuppa later.

Alan:           Maybe.  So I’ve got basically here a male client in his late 40s, no health conditions whatsoever but he was a regular skydiver and in fact actually he was due to go skydiving the afternoon – so we spoke in the morning and that afternoon he was due to go skydiving as well.  Now, he would do between 50 and 100 skydives per year.  He would never base-jump or anything like that but he did do freefalling and that freefalling was just an added complication with it.  So he basically – the base-jumping means that he’s not jumping – if it was base-jumping, he’d be jumping off buildings and stuff like that which he’s not doing.

Kathryn:       Are they the ones where they wear squirrel suits?  I think of like flying squirrels, you know, when they send their skin out in a sense, like splay themselves.  Is that the base-jumping type ones?

Alan:           Yes but I don’t think it’s called a squirrel suit.  It’s a wing suit but that’s –

Kathryn:       It needs to be called a squirrel suit.

Alan:           I can just imagine you now, just asking on the insurance application, “Do you ever wear a squirrel suit?”

Kathryn:       Yeah, absolutely but now everyone’s going to wonder whether I just ask that just of anybody and not whether or not they’re jumping or anything, just say to people, “Do you ever wear a squirrel suit?  Just, you know, you never know.”  Sorry, I’ve interrupted.

Alan:           It’s alright, we digressed.  So yes, so anyway, he’s jumping from a plane.  Anyway, I won’t go into base-jumping so the client – for this one, this is another example of where, you know, a per mille was offered.  So rather than it being a – kind of just casting back to what I said about percentage loadings and per mille, this client was offered a per mille loading.  So this chap was offered 1.5 per mille so not one, not two, just bang in the middle so for every thousand pounds worth of cover that he would buy, he was charged an extra £1.50 per year.  Now we had arranged £300,000 worth of life insurance for this gentleman so basically 300 times 1.5 and then divide it by 12 and you get roughly £38 per month extra on his premiums.  So yeah, £300,000, 20 years and it worked out at about £60 per month including that extra £38 per month.

Now, there was a couple of considerations that we had for this one.  So the first one is, we had the option with this insurer to apply an exclusion for his skydiving instead of a premium increase.  Now, it’s quite an interesting one and, you know, a lot of advisers won’t necessarily know about this one but it is something worth considering – is that some insurers will allow you to exclude certain hazardous sports and activities from a life insurance policy rather than to pay an extra premium and the reason that they’ll do this is because it’s, I guess, from their side pretty easy to know if somebody’s had an accident while they were skydiving that’s led to them passing away sadly.  I guess one of the ones where they – ‘cos it’s up to each individual insurer as to what they do with this and if they will allow it so some won’t allow it for scuba diving for example because, you know, you’ve got things like the bends for example that scuba divers can experience and they can have serious complications afterwards so that level of proof can be harder for that and obviously for life insurance nobody ever wants an unknown with these but I guess, you know, if you are seeing a super, super high premium, obviously preference should always be to pay that premium to have full cover with no exclusions but actually sometimes people will have their own insurances in place in case they do have, you know, a serious injury or if they do pass away due to their, you know, their hobby.

So sometimes an exclusion can be appropriate but usually insurers will not offer it as standard and you must ask for it.  I would just say obviously, it’s a very, very serious conversation to have with your client if it is going to be considered.  So we didn’t opt for that.  We agreed that, because he was doing sort of 50 to 100 jumps per year, actually for £38 a month, you know, we felt it was worth having full cover.  Now one other thing that we did do for this customer, we did consider and we did actually do this, is we had the option of basically having guaranteed level premiums so in other words his premiums never change and that’s what most life insurance policies are in the UK.  You buy a premium for £60, £80 a month and that price is the same from start to finish.  For this customer, to get the £60 a month, we actually chose to have a cheaper policy where the premiums go up every year as he gets older.  So his premium this year might be £60, his premium next year might be £65 and £70 etcetera, etcetera.  It’s going to go up every single year until the end of the policy.

Now, my preference 100% is always for somebody to have a guaranteed level premium but for this gentleman, actually we thought we could do this.  He was comfortable with it, it helped to offset some of that additional premium that he was due to pay and actually he’s not going to be skydiving, you know, forever.  He’s coming up to 50, you know, he won’t keep doing it to this degree forever so the idea is that then we hopefully review this at some point in the future and as long as his health permits and there’s no obvious changes etcetera, then hopefully we can switch him onto that fixed premium at that point.  Sorry, does that make sense?

Kathryn:       Yeah, yeah, I think it does make sense.  I think it’s one of those things, you know, like you say, you know, you’ve been very clear there and I think it’s again – it’s being very clear and open with the clients as well isn’t it?  Sort of saying like, “We could do this option and be guaranteed at this price forever or we can do it this way which is obviously going to be –” from this example that you were saying, “It’s going to be £20 per month cheaper from the start, you know, your premium’s being increased by quite a significant amount because of, you know, sort of the skydiving,” and like you say, is it a point where it’s not going to probably be happening for much longer and, you know, that’s the importance of renewing the cover and, you know, once you’re reviewing the cover, even though he’s going to be a couple of years older, once that kind of scuba, sorry skydiving has gone out of the way, I’m completely changing the sport there – that’s, you know, the premium itself should decrease significantly anyway.

I mean, would there be the option then possibly with that insurer to say to them, “Look I know you’ve been charging this much extra for this amount of time but now he’s, you know, we’re two years down the line, he’s no longer doing the skydiving, can we just in a sense take that out now, now that he, you know, even with proof, you know, a written thing from the client saying, “I will no longer be scuba –” sorry, keep saying scuba diving, it’s ‘cos you mentioned scuba diving once –

Alan:           Are you thinking squirrel suit?

Kathryn:       So yeah, with the skydiving, then surely as well that should be at a point even when if there maybe have been medical changes or stuff, we can potentially still just bring that premium immediately down by quite a bit.

Alan:           Yeah, so the short answer now is yes but it is insurer-dependant so we are seeing more companies now allowing that where if somebody does have a significant change like that, in the same way that if somebody stopped smoking for example, you know, they’ll ask for a written declaration maybe, you know, after they’ve been a non-smoker for 12 months and then they’ll apply a premium discount.  We can see something similar for cases like this as well but it will depend on the time the purchase – the policy was purchased and it will depend on the insurer ‘cos not everyone will do it.

Kathryn:       Yeah and I suppose as well, you know, as will anything at all points, insurers can change their stances going forward, you know, obviously they are businesses.  They are going to be changing risk appetites and strategies all the time so we may have an idea of something at this point but a couple of years down the line things may potentially change.

Alan:           Yeah and I suppose to put it from an insurer’s point of view as well with it is, you know, I guess it’s great if they do allow this for obvious reasons but actually there is a risk there because if somebody signs that and then they go – let’s say this chap stops doing his skydiving and then, I don’t know, five years down the – he signs his letter and says, “Yeah, I’m out of it.”  Then five years later says, “Do you know, I really miss that,” and he gets back into it heavily, obviously the insurer’s already reduced the premiums.  Does he then have to sign a letter to say, “Well I’m doing it again,” you know, or is it then just allowed, you know, so there is that added bit of complication with it as well and I’d obviously add a bit of risk as well.

Kathryn:       Yes it’s tricky, and so a final case study – are we back to health now?  Are we doing another health one?

Alan:           Yes, I’ll finish off – and interestingly another cancer one actually as well.  So this case actually started just before lockdown and before Covid so it sort of got extended a little bit over the – obviously the last couple of months as you could probably well imagine.  But this gentleman in his mid-70s was a non-smoker.  Now, he was type two diabetic, well controlled with diet and with tablets but he’d also had prostate cancer which had been diagnosed nine months ago, so less than a year ago.  Now he had – so basically he had a Gleeson score of seven and it was a stage 2A.  Now basically these just indicate how advanced the cancer was.  I guess, you know, probably a lot of people have heard of stagings of cancer.  Typically you go stage one, two, three and four depending on how – again how advanced it was.  The Gleeson score is more about the grade so a Gleeson score of seven is the higher end of a medium grade.  An eight, nine or a 10 would have been a higher grading cancer.  So I guess you could say it was on the higher end of the middle sort of ground of it on that sense and actually, you know, a lot of critical illness policies will use Gleeson score of seven as a start when they will start paying out as being serious enough.  So it’s kind of just on that cusp with it.

Now, he had a prostatectomy nine months ago so basically had most of his prostate removed.  He didn’t need radiotherapy and he didn’t need chemotherapy.  Now obviously this wasn’t that long ago in the grand – sort of in the grand scheme of things but most – I guess, you know, you probably would expect for this one to some degree is that most insurance companies were declining and postponing cover for him until he was further along from his treatment.  A lot of companies would want to see him at least a couple of years down the line just to make sure that everything was ok.  The thing is with prostate cancer is actually, from my understanding it’s got a very high survival rate especially where’s it’s obviously been caught at a reasonable time and obviously treatment’s been done so there are a couple of insurers who actually would consider life insurance for this gentleman and, you know, I think that for me is just incredible.  To say that someone could actually have, you know, high – with a higher end of medium grade prostate cancer, have his prostate removed and still be offered life insurance within a year of having his treatment, I think is a real testament to how far our industry’s come.  You know, and how many good things they can do.

So we chose a company and we applied for £100,000 worth of life insurance over 10 years, went out to the doctors, got a medical report, got his specialist reports, his oncology reports etcetera and the case was declined unfortunately so the insurance company said they wouldn’t be willing to offer the cover for him.  This is where I think, you know, Cura are different and I’m not saying we’re alone in this but I think, you know, this is something that we do that’s very, very different to a lot of firms.  Now, the decline letter essentially, you know, I can’t remember exactly what it said but it was either, “Due to your prostate cancer or due to information received from your GP,” it was one of the two but obviously as these letters usually are, they are relatively basic and to the point.  What we didn’t understand is we knew this cover should have been offered.  We’d had a lengthy conversation with an underwriter beforehand.  I think it had possibly even been discussed with the reinsurers which are the people behind the insurers who pay the majority of the claim, almost like the insurance company’s insurance company and yeah, we were really, really surprised because, you know, as far as we were aware, this client’s specialist had said, “You are completely clear of this.”

I’m going to state just before I say this, I’m not a doctor, I’m not medically trained so please do not take what I am about to say as absolutely medically factual but we were able with the customer’s consent to speak to the insurance company and we were able to go into a lot more detail than just relating to your prostate cancer.  So what we actually found out is that when they cut away the prostate, they will look for a negative – what they call a negative margin all around the excision area, so basically the area that they’ve cut out and what that means is there is an area of tissue around the cancerous region which is tested normal so it’s classed as normal tissue.  There’s no evidence it was cancer in that almost circle or whatever shape it is around the excision and if there’s a negative margin, they can then safely say – reasonably – with reasonable confidence, “We think that we’ve got it all.”  The danger is from my understanding – is if there is an area where they couldn’t prove it or it was still proving positive, i.e. a positive margin, that would show that there was cancerous cells or tissue right up to the edge of the excision point and this is basically what had happened.  They said that there was evidence of a positive margin on an area that – on the area that they’d removed.  Now we were then able to take this and obviously have an extremely sensitive conversation with the customer –

Kathryn:       I was going to say, that’s a difficult conversation to have isn’t it because if someone has had – obviously they’ve faced cancer, they’ve had the surgery, they’ve had their surgeon, they’ve had the GP – everybody say to them, “You’re through it, you know, that’s fine, you know, you’re cancer-free in a sense.  Yes you’ll have check-ups but, you know, we’ve got it.”

Alan:           Yeah.

Kathryn:       And then you’re then told by an insurer, “Well actually there’s still positive cancer margins there.”

Alan:           And there’s a chance, yeah –

Kathryn:       Yeah and there’s a chance and that is a huge responsibility upon an adviser that advisers are not trained for – I don’t think there’s anything in our industry that actually trains an adviser how to handle that conversation with a client and prepare them for – for one for the client to hear that and also for the adviser, how to present that in the best way and then also how to look after themselves depending upon how the client is themselves when they hear that information.  It’s a very, very tough conversation to have.

Alan:           It is and, you know, this insurance company I’m sure would if needed have that conversation with the customer direct if needs be and, you know, I guess one of those circumstances where they probably could have contacted the doctor and, you know, gone through that route but actually, you know, this customer themselves had been in the insurance industry, they know how this works and I had a very, very good relationship with this customer so I could gauge it and, you know, realised that I could have a level of a conversation with him.  Now, in no way did I at any time indicate that he still had cancer or that they hadn’t got it.  In fact, my approach was more that this is, you know, more likely a mistake or that the doctor and the specialist haven’t actually – not saying that there is still something there it’s just they’ve not provided evidence that there isn’t so what we now need to do is get that evidence that there isn’t.  That’s what we need to speak to your specialist about.  The client was absolutely fantastic about it.  He got straight on to his specialist, they had a conversation about it, the specialist wrote a letter and said, “Actually, looking at this, I can understand why you’ve said this and why you’ve thought this, here’s what you need and here’s the evidence that you’ve asked for,” and he was then able to provide additional evidence and additional support, went back to the insurers, went to the reinsurers and I am pleased to say that they then offered the cover for him.

So this was a perfect example for me of where that customer could have walked away with absolutely no cover whatsoever had it have been left at that stage.  The insurer had already paid for medical evidence, we’d spent time on it, the customer had spent time on it but actually it needed that little bit of extra help to get it over that last hurdle.  Now it could have gone the opposite way and, you know, some obviously will go the opposite way and not go ahead but at this stage, just taking that extra step was able to see this case over the line and get him cover.  We were able to arrange him £100,000 worth of life insurance over 10 years.  Now bear in mind this chap’s in his mid-70s so his basic premiums were quite high anyway and the final premium for this chap was around about £350 per month.  Now the interesting point about this is his premiums only went up by 75% which, you know, yes on his size premiums because of his age obviously makes a bigger difference but if you compare that to some of the premium increases we saw earlier, it’s nowhere near as big considering obviously prostate cancer within the last year and diabetes.  So obviously a very happy customer and yeah, just obviously everyone was really happy with this one.

Kathryn:       I think, you know, that one’s a really good testament and to show people as well that it’s sometimes, you know, and what we do quite regularly, you know, it’s all about digging for that little bit more information, just a bit more clarity as to why something has been sort of like decided the way that it has because, you know, if the insurers are making a decision, most of the time it’s because they maybe have a little bit of extra information that’s come out, possibly in a GP report that you’re unaware of or what we see quite often and it’s not having a go at GPs or anything like that but GPs are under enormous pressure and, you know, their resources are so strained and we do find quite often that a lot of these reports maybe will have the wrong information in them and they do need to be corrected quite regularly and it’s quite surprising actually the amount of times we come across that, thinking about the amount of people who do have difficulties getting insurance, how many times it may just simply be that there’s something in their reports that they don’t know about, that’s been put in by – in error potentially and they don’t necessarily have the support services of an adviser there to be able to say, “Well actually let’s have a look at this ‘cos something’s just not adding up right now.”  I’m not saying that’s always the case but it’s just something that we do see quite regularly and yeah, it’s definitely worth doing a bit more digging.

Alan:           I’ve seen quite a lot of cases where people have had diabetes in their records but yet it’s not meant for them, it was meant for another customer or it had been, you know, sorry for another patient and stuff so, you know, it’s so important to get these things checked sometimes.

Kathryn:       Absolutely, absolutely and I was going to say and obviously thank you so much for providing those case studies, you know, I think it’s really important to just showcase – obviously we’ve done quite a few health ones, I think that’s probably where a lot of people have quite a few queries about, but to show the different types of risk as well, we’ve looked at occupations, we’ve looked at squirrels skydiving out of the air –

Alan:           The next line of insurance to do isn’t it, skydiving squirrels.

Kathryn:       Absolutely.  I am there to help anybody who wants to set that up.  Absolutely.  But yeah, I think – thank you very much for that and I say next time people – so the people that are listening, we will be going on doing sort of like a real income protection focus just to kind of get that message across so the differences that can be done there because I think it’s quite standard as well, you know, people with health conditions that income protection isn’t always seen as the most accessible route and I know once you’ve got a couple of medical conditions it does become trickier and trickier but sometimes it can just be a matter of sort of like changing the way of looking at it a little bit as an adviser and trying slightly different routes.

So we’re coming to the end of the case study section so Alan, I think you were going to have a very quick chat – obviously you do quite a lot of different things across the industry but one of the main things we were going to chat about this time was the work that you’re doing in the PDG, sort of chatting about the – obviously you’re going to go through the funeral pledge and the claims charter so this is something that’s really good as well for advisers to be aware of because these are things that a lot of insurers have signed up to and it’s kind of like a bit of a best practice or certain set of standards that they agree to uphold if there is a death claim or at the point of any claim and it’s good to know about that because if you do have a client who is having to put the claim forward or a client’s family, then if you know one of the insurers is in a sense signed up to this, then you know what kind of level of service and processes should be put in place and you can follow – there’s the PDG’s charter to see what should be happening.  But Alan, if you want to take over and explain it a bit more please.

Alan:           Yeah sure so yeah, I have – well I’ve got a couple of different hats but I guess one of them – one of the main hats that I wear other than as MD at Cura is as the current chair of the PDG or the Protection Distributors Group.  So the PDG, for anybody who doesn’t know, is a group of 14 insurance intermediaries, all advisers, who basically work together to help promote best practice, to help raise the positive profile of protection and, you know, to help improve customer outcomes.  You know, we’re on the frontline, we’re on the coalface, you know, we’re talking to customers, we see the good and sometimes the bad as well that will happen in the protection market and, you know, having a group like this is just so important to be able to help to raise the standards and just to help more customers and, you know, for some – so when I first started in the industry, my – this was sort of 15, 16 years ago, my old boss basically said, “You never ever can work with competitors,” you know, “Never collaborate with other people, never have anyone –”  In fact there was a story about him chucking an IFA out of our office when he came in to meet me at one point, you know, he used to just say, “They’ll steal your ideas, they’ll steal your business, you just can’t work with other people.”  And, you know, he was a dinosaur, this was a thing of the past but what the PDG really proves to me is just how wrong he really was because, you know, as a group you’ve got there 14 firms who, you know, arguably are all competition, you know, we all work in different intermediary firms but we share ideas of best practice, we talk about customer outcomes and the industry and, you know, it’s there to have a voice for protection advisers, you know, it is proof that working together can really, really accomplish great things.

So to give you a couple of examples then, so the PDG have put forward a couple of campaigns for insurers.  Now, their first one that we released back in 2016 was the funeral pledge.  Now, obviously most claims as we know for life insurance are paid quickly and, you know, luckily most don’t necessarily get tied up too much but unfortunately some do get tied up due to things like probate so the insurers will have them all approved and ready but then they are tied up because they are not placed in trust.  You know, you’re waiting for the grant of probate, things will be sorted out etcetera and what’s really, really – I guess daft in a way here is a customer’s family might be sat there with £100,000 ready to pay out in a life insurance policy but until that probate is sorted, it just sits there.  So the family might end up needing to then borrow money in order to pay for the funeral, even though they’ve got all that money sat there ready to pay out to them.  It’s crackers, it really is.

So what the PDG asked for as part of their funeral pledge was that an insurance company would pledge at least £5,000 to the family of the deceased person so that they can pay the funeral without having to borrow it.  Now, you know, it is relatively simple but can have a huge, huge impact to some of those families who are unfortunately caught out by this.  Now, we set a few criteria with it so we asked that it be paid directly to the funeral director and obviously it be deducted from the final claim amount.  We asked only that it be paid once the claim had been approved medically so the insurer could then rule out any risk of non-disclosure so only paying out what they would have already agreed to and we offered – we asked that it be offered proactively on any case where there was a delay for example such as something like probate and I’m pleased to say that to-date 12 insurance companies have now signed up to the funeral pledge.  So it’s, you know, it’s been a fantastic success and actually all of the 12 companies that have signed up to it have exceeded the 5,000 and said they would pay up to 10,000 if it was needed, so –

Kathryn:       That’s all on the PDG website isn’t it, as well, the ones – people who are signed up for it and that information’s there?

Alan:           Absolutely, absolutely.  Now the second one which was launched a couple of years later in 2018 was the claims charter so, you know, I don’t think anyone would argue if I said, you know, the moment of truth for any insurer is at the point of claim.  It’s why people buy the policy and we all hope that people don’t need them but if they do need them, that’s what they are there for.  You know, it’s when the customer’s family needs us the most or when the customer themselves needs us the most if it’s, you know, income protection or critical illness and as advisers, you know, we do see again, you know, more – being on the frontline of sort of handling the claims and speaking to the families, we do see the good and the bad that happens.  Largely good, I would add, you know, which obviously is great but we therefore decided to use our experience and put together seven key points that we felt would help insurers deliver an efficient and hassle-free claims experience.

So I’ll quickly run through these.  So the first is, we ask that a dedicated claims team be provided, that claims be assessed by the phone wherever possible allowing digital documentation to be sent rather than relying on the post and, you know, old fashioned ways like signatures and actually the post only to be used as a last resort or where there’s no other sort of choice.  This next one, it’s so important for me – is that no potential claimant can be turned away by anyone other than the claims team.  So I’ll give you an example of this, so this was one that we had – we had a call from a client years ago now and the customer had had an acoustic neuroma which is basically a form of benign brain tumour.  Now he’d rang his insurance company and he told them about it and said could he make a claim on the policy and he was told no because it wasn’t a claimable condition.  Now, what the person at the insurer hadn’t realised, who wasn’t a member of the claims team, is that actually an acoustic neuroma was a form of benign brain tumour and a benign brain tumour was covered by his policy.  So obviously we got involved, we helped the customer back to the insurer, we registered a claim and I am pleased to say that the policy paid out for the client.

Now, had we have not been involved or had he have not spoken to us, he’d probably still be sat there, he might have cancelled the policy or still be sat there with a claim not paid on it.  So having, you know, making sure people can’t be turned down by someone who isn’t part of the claims team – and also on that is to make sure that the people handling that, especially if there is a rejection involved, that they are trained to do that, to be fair, for both the person speaking to the client and the client.  We ask that claimants have a named point of contact and they have regular updates at least every two weeks unless otherwise agreed and that obviously things be responded to quickly as well.  We ask that intermediaries are notified of all claims, you know, without having to opt into them and this is just – again, it is so important because as an intermediary, a lot of us will ring our customers on a reasonably regular basis, you know, maybe once every year for example or every couple of years to review peoples’ policies.

So imagine what happened if we ring a customer and actually that family – we ask to speak to Mr Jones and Mr Jones’ family then informs us that actually he passed away six months ago and made a claim on his insurance policy.  Now that might be a partner, it might be a family member, it might be a child, you know, if we asked to speak to the father or the mother or something who then have to inform us that they passed away and that’s just not a position that’s good for us or for the family.  So, you know, to minimise distress on both sides, just so, so important.  We asked that the funeral pledge or a similar advanced payment to speed up claims is proactively offered and once a claim is approved, we asked that it be paid within 72 hours basically to the family once it’s all gone through.  So, you know, these are I guess – some of them are relative – most of them are relatively straightforward and most insurers would do at least some of these but there weren’t many who were doing all of these and again, similar to the funeral pledge, I’m really delighted to say that there are 12 insurers also who have signed up to this and a number who are working hard to be on it as well.

Kathryn:       Yeah, I was going to say, what’s nice about those things – I think like with the funeral pledge as well, it’s just that it’s the right thing to do and it’s another signifier from insurers that they are doing everything that they can to support people when these times – when things like these – sort of like the claims happen and I think with the claims charter, like you were just saying there, it just really struck me, it’s just like – it’s just kind of common sense a lot of those things, you know, it is just something that should really be happening as standard but I think probably it’s a bit – it’s probably a case of where, you know, some people overhear some things that work well, another insurer hears some things that have worked well, as intermediaries we’re kind of sat watching it all and then seeing all these best practices coming in different places and trying to put them all together to say, you know, “This is actually a really good strategy,” and going forward obviously I’m delighted to see the claims charter and the funeral pledge had so much support from insurers.

And I was going to say, I think you have had a good little natter there so I don’t think we have time to talk about all your other things that you’re doing so do you want to chat a little bit about your Access to Insurance working group and then I think what we’ll probably do is save your new position as an executive on the Income Protection Taskforce for our actual income protection masterclass.  That will probably fit in well there so do you want to finish by telling everybody about the Access to Insurance working group, what you’ve been up to and where it stands?

Alan:           That was Kay’s subtle hint to tell me to be quiet and hurry up a little bit in case anyone didn’t get it.

Kathryn:       It’s so unusual to be able to do that to you for a change.

Alan:           I know, it’s usually one of those things where Kay is, you know, I’ll ask Kay how her day has gone and she’ll sort of, you know, read it chapter and verse of what’s happened and she’ll say, “Oh well how was yours?” and I’ll say, “Yeah it was alright, thanks.”

Kathryn:       You hate it when I don’t take a two-hour time to tell you about my day.  You love my tales.

Alan:           Right, so Access to Insurance.  So, yes, I think most people obviously will have heard of this working party by now and obviously what we do.  Very quick overview – so the PDG are quite heavily obviously involved in this as well and obviously it’s of personal interest to me as well in terms of helping, you know, more people get access to insurance, especially those people who are living with health conditions and disabilities.  So two years ago, the working party was formed and we have four main workstreams; one of – the first of which is underwriting and transparency, so this is all about how do we make sure that decisions to, you know, applications, to – for example if somebody is declined, postponed or offered a higher premium, how do we ensure that those decisions are communicated openly and transparently but at the same point not giving the customer so much, you know, mind boggling information that, you know, they wouldn’t understand it?

A perfect example to me is if we go back to the case studies that I gave and especially the last one with the gentleman with prostate cancer, you know, he – we were obviously told in that decline letter that it was due to medical information.  Could it have been a little bit more open?  Could it have given a little bit more that might have made us or the client realise what was happening or maybe if he’d have asked for more, how could we have got that extra bit of information?

The second workstream is signposting so effectively for people who are declined insurance, especially those who go to buy direct from insurers or online, if they can’t be offered life insurance or critical illness etcetera, rather than just sending them on their way and saying, “We can’t cover you,” what can we do to signpost them to a specialist firm and, you know, one example of that now is BIBA have launched their Find a Broker service for the protection industry where there are a list of specialists on there, so if somebody is struggling to find insurance, they can go on there and hopefully find a specialist who can help.

We have a workstream dedicated to group risk so group insurance is basically life insurance, critical illness, income protection but where a group of people buy it, mainly through a company and it’s a fantastic way for people with health conditions and disability to get the same insurance as everybody else because the risk is pooled amongst a group of people.  We then have – last but not least a professionalism workstream which is all about promoting and improving professionalism within the protection insurance sector.  So all of these have come together and I’m aware that I’m obviously – probably stripped a little bit for time so I won’t go into too much with it but really do and are helping to improve things for people with disabilities and medical conditions.

Kathryn:       Brilliant, well hopefully we’ll hear some of like – you were saying like the BIBA developments coming forward from that as well.  I’m obviously on the – I’m an executive on the committee there so it’s really good to see that that Find a Broker scheme has really kicked off, quite spurred on obviously by what’s been done in the groups that you’ve just mentioned there so it would be good to see sort of like – as we come up in the next few months or so, the next things that are being developed but we’ve got on to – sort of like our truth and lie feature now.  So –

Alan:           Ooh!

Kathryn:       Ooh!  So just –

Alan:           So I feel like I needed to do the sound effect there.

Kathryn:       Why not then?  Actually I feel like I’m going to do that each time now but maybe my other guests won’t know what that means.  So, do you want to give your truth or lie Alan please?

Alan:           Yeah, so my truth or lie is that I was stung by a bee this morning whilst out running at bootcamp.

Kathryn:       And I’ll say that my truth or lie is that I was stung by a bee whilst fossil hunting with the boys this morning.  Ah yeah, let’s see if anybody gets that one right.

Alan:           So one of us was stung by a bee anyway.

Kathryn:       Yeah, absolutely.  So thank you very, very much to everybody that’s listening and thank you for joining me Alan and I know that this wasn’t necessarily the – sort of like your most favourite thing to do on a Bank Holiday Monday but I appreciate that you’ve done it with me.  I’m going to be back in two weeks’ time chatting with Vicky Churcher.  We’re going to be chatting about her experience having a heart attack, her recovery and the support that she received from her insurances that really helped her and her family.  If you’d like a reminder of the next episode, please do drop me a message on social media or visit the website, www.practical-protection.co.uk and don’t forget that you can claim a CPD certificate on the website for listening to this.

Now one thing I have found out is that some insurance companies, and I think some other companies as well – certain sort of like the internet systems in the businesses are not keen on Google Forms and the CPD certificates are done using a Google Form so if you are finding that and it’s having a bit of a hissy fit when you’re trying to access it, please don’t worry at all.  Just contact me on social media, all I need is sort of the episode that you were listening to, your name and your email address and I can get everything sent over to you.  So hopefully that will work if you’ve been having any issues.  But thank you again, Alan, for joining me.

Alan:           No, thank you very much for having me.  I will see you in a couple of minutes.

Kathryn:       I shall see you in a couple of minutes too.  Bye!

Alan:           You too, bye!