History of drug use
Lee: If the client uses or has used recreational drugs in the past, this does increase the level of risk posed to the insurer.
This is because the drugs could have damaged their health in ways that might not be immediately obvious and there is also the risk of accidental overdose with some drugs.
Drug use also points to a more reckless personality type where there may also be increased risk from other causes, such as accidents etc.
Morris: There is a huge variation in how different insurers approach drug use and ultimately to how they underwrite the policy.
From previous cases we have seen a huge difference in the loadings applied from standard rates with one provider to a decline with another for exactly the same client.
Therefore, it is a must to approach the whole market prior to the application to understand who is the best provider for your client’s circumstances.
Alcohol intake
Lee: If the client drinks alcohol in moderation, it is unlikely to have an impact on premiums.
But if they drink very regularly and/or in larger quantities, this is when the risk to health increases and premiums could therefore rise.
It is important to be accurate about reporting alcohol consumption when applying for life insurance.
The questionnaire will usually ask how many units of alcohol your client consumes on a weekly or monthly basis.
For context, a pint of lower strength beer contains two units of alcohol whereas a higher strength beer can be three units.
It is generally well understood that alcohol in large quantities or over a long period without any alcohol-free days can cause long-term health issues (affecting not just the liver but other organs as well) and is therefore a higher risk for the insurers.
Cancer
Lee: This is a complex question because every cancer diagnosis is different and the detail is really important. A few things that can affect the level of risk include:
- The location and size of the tumour.
- Whether the cancer has spread.
- How long ago the client was diagnosed.
- What grade the cancer was.
- The treatment they are receiving or have received.
Insurers may differ significantly so shop around to find the right level of cover at the best price.
BMI
Lee: BMI is not a helpful measurement of health for everyone (eg high muscle mass), but generally speaking it provides a useful benchmark for overall health.
For this reason, the client’s BMI will usually be taken into consideration by insurers alongside other measurements such as blood pressure, waist measurement and cholesterol levels to give an overall metabolic risk.
The higher the metabolic risk, the more chance there is that premiums will rise.
Diabetes
Lee: Diabetes affects multiple systems within the body and increases the risk of heart disease and problems with the kidneys, nervous system and eyesight.
