Drewberry Insurance: Never Blindly Accept a Life Insurance Premium Rating

By Drewberry Insurance, PRNE
Monday, February 21, 2011

LONDON, February 22, 2011 - Drewberry Insurance encourages individuals looking for the best life
insurance deal who have medical conditions or participate in hazardous
activities to seek financial advice as premium risk loadings vary wildly from

When gaining life insurance quotes online, such as for mortgage life
insurance, (
www.drewberrymortgageinsurance.co.uk/mortgage-life-insurance/) the
premiums returned assume that the applicant does not have any pre-existing
medical conditions or participate in any hazardous activities, such as
diving, climbing or private aviation.

In this instance, the premiums quoted online can be very misleading and
often end up being significantly higher after the application has been
underwritten by the insurer. Unless the applicant can honestly go through the
entire application ticking 'no' to all the health and lifestyle questions
then financial advice from an insurance adviser really needs to be sought.

Advisers can speak directly to the underwriters at various insurers to
see what their likely underwriting decision would be; this can significantly
impact on the best choice of insurer for the client. As underwriting
decisions vary so wildly between insurers, individuals could save hundreds,
if not thousands, over the life of the policy by applying to the insurer
offering the most favourable terms.

The following are real life examples from Drewberry Insurance clients of
likely pre-application underwriting outcomes given a medical condition or the
pursuit of a hazardous activity*:

Health Example One: Polycystic Ovary Syndrome (PCOS)

This applicant was seeking mortgage life insurance with critical illness
cover. (
PCOS is believed to affect around 5 to 10 per cent of women of
reproductive age and is one of the most common causes of female

For very mild cases some insurers can offer standard rates with no
premium increase whereas other insurers would increase the premiums by a
minimum of 50 per cent. As PCOS is also associated with obesity each insurers
Body Mass Index (BMI) cut-off point will need to be considered, along with
blood pressure and cholesterol readings. Thus, by applying to the right
insurer the applicant could save at least 50 per cent on their premiums.

Health Example Two: Multiple Sclerosis (MS)

This applicant was looking for life insurance only. MS affects the
ability of nerve cells in the brain and spinal cord to communicate with each
other and can lower life expectancy by 5 to 10 years.

For progressive Multiple Sclerosis all insurers would likely decline
cover. However, for milder cases, termed as relapsing remitting MS, terms can
usually be obtained. For the mildest cases nearly all insurers would increase
the monthly premiums by 50 per cent, whereas a few insurers would increase
the premiums by a minimum of 75 per cent. In this case, applying to the wrong
insurer could cost an extra 25 per cent in premiums.

Activities Example: Recreational Helicopter Flying

This applicant was seeking life cover only and flew a light-weight
helicopter for less than 10 hours per annum. The likely underwriting decision
for any type of private aviation will depend on a number of factors; such has
flying hours, type of aircraft and pilot qualifications.

Only one of the main UK insurers was willing to offer standard rates,
whereas the strictest insurer stated that they would increase the monthly
premiums by 24 pence per GBP1,000 of cover, which equates to an extra GBP24
per month for GBP100,000 worth of life cover.

In a separate example of an applicant who flew an unpowered glider one
insurer was willing to offer standard life insurance premiums for up to 100
hours flying per annum, whereas some other insurers would increase the annual
premiums by GBP1 per GBP1,000 of cover even for one hour of flying per annum.

Tom Conner, head of mortgage protection insurance (
at Drewberry notes, "With so much variation in underwriting decisions
between insurers it can be a very expensive mistake not seeking advice.

"Whether it is a medical condition or a hazardous actively it is not
uncommon for a 100 per cent premium loading to be imposed with one insurer
and no loading whatsoever with another insurer.

"The key is to speak to someone who is independent so they can seek
likely underwriting decisions from all the main insurers before deciding
which insurer represents the best bet in terms of obtaining the lowest

Notes to editors

*Likely underwriting outcomes are only indicative based on the
information collected during a client fact find, which is then passed on to
the underwriters at each respective insurer. Final underwriting decisions
would need to be made in accordance with a fully completed application and
further medical information/evidence.

For more information on insurance premium loadings and exclusions please

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About Drewberry Insurance

Drewberry Insurance is a trading name of Drewberry Ltd, which operates as
a whole of market insurance intermediary in the health and protection
insurance markets. Drewberry Insurance offer insurance broking services for a
range of individual and group insurance policies.

On the personal insurance side of the business Drewberry provides advice
on individual health insurance, family health insurance, (
www.drewberryhealthinsurance.co.uk/family-health-insurance/) mortgage
protection cover, life insurance, mortgage life insurance, income protection
cover (www.drewberryincomeprotection.co.uk/) and critical illness

On the group insurance side of the business Drewberry provides advice on
group health insurance, (
www.drewberrygroupinsurance.co.uk/group-health-insurance/) group life
insurance, group income protection and group critical illness cover.

Drewberry Ltd is an appointed representative of Chase Templeton Ltd which
is authorised and regulated by the Financial Services Authority, register
number 311612. Registered address: Vantage House, 1 Weir Road, London, SW19

    For further information please contact:

    Andrew Jenkinson
    Drewberry Ltd
    Vantage House
    1 Weir Road
    SW19 8UX

For further information please contact: Andrew Jenkinson, Drewberry Ltd, Vantage House, 1 Weir Road, London, SW19 8UX, +44(0)20-8432-7334

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