4/10 life insurance customers ripped-off by ratings
ConsumerWatch / Insurance Apr 08, 2007 - 10:29 AMBy: Submissions
Shocking research from specialist insurance website BestDealInsurance.co.uk reveals how greedy life insurers are making huge profits from loading up customers' life insurance premiums for what are sometimes only minor ailments.
David Thomson, Chief Executive from the company says: “It is scandalous just how many consumers are getting hammered by their life insurer for so-called health risks. For example, if you want insurance and a family member has multiple sclerosis some companies will impose a limitation on to what you are covered for.
“And if you are a female and have a family history of breast cancer (where the sufferer was aged under 50) you will attract an automatic 50% rating from one insurer but will pay standard rates with another”.
He adds: “Ten years ago, around 80% of us would have taken out life insurance at a standard rate, with no loadings. Yet now – despite the great advances in medicine, earlier detection methods and increased survival rates for people who have suffered from a serious illness - only 60% of us can expect not to have our premiums hiked up.
“That leaves an astounding 40% of people facing loadings on their insurance – mostly which is down to the insurers' using any minor health ailment or family association as an excuse to bump up your life insurance premiums and therefore put more money in their pockets.”
The knock on effect, says David, is that more and more people are shying away from taking out life insurance for fear of the high premiums, leaving them and their family financially vulnerable.
David says: “We have many clients who come to us having had a rating imposed on their policy and in most cases they do not have a clue as to why, because the insurance companies do not tell them
“All the client knows is that the price they were originally quoted is not what they are being asked to pay now. In most cases a rating of at least 50% will be imposed, meaning the premium the client was originally quoted has increased by 50% from say £50 per month to £75 per month.”
He explains that the biggest reason why premiums are loaded are either the client's height and weight; they do not fit with that insurers guidelines; and finally, the clients' families' medical history does not fit with the insurers guidelines. Yet simply by using another insurer the customer may not face a loading at all.
David summarises: “These underhand tricks by some of the insurers can only serve to damage their reputations and lose them business. We strive to find out what loadings are placed on to premiums before making a recommendation to the clients and strongly urge consumers to speak to an experienced life insurance broker before signing on the dotted line for life cover.”
BestDealInsurance have now implemented a new system that shows what health condition or family association individual insurers will accept and which they will add loadings for. This enables BestDealInsurance to find their client the right life cover for them, without them paying inflated premiums or having inadequate cover.
Submitted by: David Thomson
bestdealinsurance.co.uk
Bestdealinsurance.co.uk was launched in March 2003 and is dedicated to ensuring that not only do their customers get the best deal, but that they actually understand in full the terms and conditions of the product that they are buying.
Authorised and regulated by the Financial Services Authority, they are completely independent from the large life insurers so will always offer products on an unbiased basis.
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