November 24, 2016

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Life Insurance – Can I appeal against an Underwriting Decision?

Can I appeal against an Underwriting Decision?

We have been recently contacted by Mrs D, a 66 year old widow. She was in the process of providing a gift of £850,000 to her children following discussions with her solicitor. The gift will be liable to a tax charge of 40% on a reducing scale if Mrs D dies within 7 years of providing the payment. Mrs D requested a life insurance policy to ensure that funds will be available to cover the tax bill should she pass away within the 7 year period.

We recommended a Gift Inter Vivos policy with an initial sum assured of £340,000 (40% of the gift) over a term of 7 years. The sum assured reduces over the term in line with the tax liability. The policy was quoted with a cost of £179.67 a month on non-smoker rates and Mrs D was happy to apply. The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

The Insurance Provider requested that Mrs D completes a medical due to her age and the level of cover. They arranged for a nurse to visit Mrs D at home. On receipt of the nurse’s report, the Insurance Provider felt that information warranted an increase of 75% onto the premium so the cost increased to £322.60 a month.

Mrs D was understandably unhappy with the increased cost and requested full details of how the decision had been made. The Insurance Provider sent a copy of the medical report to her GP along with their reasons for increasing the premium. The main concerns from the Insurance Provider were that Mrs D’s weight (BMI) was marginally more than she thought and more importantly, her blood pressure was very high.

Our client’s GP disputed the nurse’s findings. He wrote to the the Insurance Provider explaining that although she had previously suffered raised blood pressure, she had been prescribed medication and he considered her condition to be well-controlled.

The Outcome

The Insurance Provider assessed the GP’s comments and agreed to reduce the increase to the premium from 75% to 50%. This meant that the premium became £276.86 per month (£45.74 a month less than the previous offer).

This being the case, the total cost of the premiums over the 7 year term will be £23,257.  Mrs D and her family consider this to be a cost effective way of covering the potential inheritance tax bill of £340,000 and the policy is now in place.

Please note that any premiums mentioned are indicative only and based on this specific case study/ example, which is shown for information purposes only. Your own circumstances will determine whether the amount payable is more or less than the figure quoted.

Next steps

Whilst you are welcome to get a quote on-line but we would recommend you talk to one of our advisers.

Any quote that your adviser provides you with will take into account to your circumstances, your medical history, as well as your budget!

An on-line quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.

Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00.

Please feel free to read our Independent client reviews, or read about the team at Future Proof.

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For further information about arranging cover after Cancer, please read our Guide here.

Interested in related stories?

Take a look at our handy guides ‘What Cover is Right for me?’

Do you suffer with a medical condition and concerned you can’t secure Life Insurance?  Please view our ‘Medical Guides’ for further information.

Whilst we will make every endeavour to help someone to arrange insurance, there is no guarantee of success.  All applications are subject to underwriting.

Freephone: 0800 644 4468.

To read more about High Blood Pressure, please click here to read the NHS Website.

To read more about Gift Inter Vivos cover, click here to view our blog.

Whilst we will make every endeavour to help someone to arrange insurance, there is no guarantee of success.  All applications are subject to underwriting.

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