Income Protection Insurance and Medical Conditions: Being Overweight

March 18th, 2010

Being overweight is becoming ever more prevalent in Western societies, where the combination of an abundance of unhealthy food, work which requires us to sit down all day, and unprecedented numbers of labour-saving devices all mean that we take in far more calories than we burn. It is an issue for many people, and the effects of being overweight reach out of the immediate concerns of not being able to fit into your old clothes, and have some unexpected consequences. If you are overweight, you may find it difficult to find a decently priced income protection insurance policy – we give you some tips for getting a good price.

Why income protection insurance costs more when you are overweight

By far, the conditions and events that give rise to the most income protection insurance claims are:

  • Heart attacks
  • Cancer
  • Strokes

All of these conditions have a strong correlation with being overweight, and its stresses on the body. This means that overweight people are greater insurance risks, and therefore pay more for income protection insurance.

I’m not that big – will the insurance companies think I’m overweight?

You would usually have to fall into the clinically defined ‘overweight’ range by your BMI – Body Mass Index. This is a measure of your weight compared to your height, and you can calculate your own with Weight Watcher’s online calculator. If your BMI is above 25, an income protection insurance provider might consider you overweight.

Reducing your premiums

There is one quite obvious way to reduce your life insurance premiums … lose weight. For many people though, this is far easier said than done. Habits are difficult to break, work and other duties mean we have little time to exercise … and in general, people feel that if it was easy to lose weight, they already would have. So, aside from the obvious, you can help reduce your income protection insurance premiums if you are overweight by:

  • Removing other risk factors for illness: Stop smoking and drinking, and you can also reduce your premiums
  • Reduce your premiums in the standard ways: Income protection insurance may still be affordable if you choose to insure less of your income, or go for a higher waiting period
  • Shop around for different insurance quotes: Different insurers have varying levels at which they consider a person overweight – some may allow a BMI of up to 28 before it has an impact on your premiums.

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Posted in Income Protection Insurance | 63 Comments »

Life Insurance and Medical Conditions: Sleep Apnea

March 15th, 2010

Sleep apnea can be quite a destructive condition, in terms of health. The condition means that the airway is temporarily blocked during sleep, causing either snoring or spluttering for breath, frequent waking and poor quality of sleep in general. Around 6.5% of the Western world population is estimated to be affected by sleep apnea, so this is not strictly a ‘niche’ problem. While many people don’t remember most ‘events’ or ‘apneas’, they can have quite an affect on your health … and therefore your ability to get life insurance cover, as well as the price of your premiums. We look at how to maximise your life insurance benefits when you have sleep apnea.

Types of sleep apnea

The main types of sleep apnea are obstructive (where your airways relax so much that they close over during sleep), central (where a nervous system conditions fails to relay the signal to breathe to your lungs, temporarily), or mixed, which is a little of both. It is more difficult otget life insurance with central sleep apnea, as it is less simple to treat.

Habits that exacerbate sleep apnea

Life insurance companies will look less favourably on your application for insurance if you have any of the following habits that are seen to exacerbate (or even cause) the effects of sleep apnea:

  • Refusing treatment for sleep apnea
  • Obesity
  • Drinking alcohol, even if you drink less than the recommended amount
  • Smoking, including cigars, pipes, or substances other than tobacco
  • Taking sleeping pills

Recommendations before applying for life insurance

If you want to reduce your premiums as much as possible – and of course, give yourself the best chance at living a long and healthy life – you can do the following to help reduce the effects of your sleep apnea before applying for life insurance.

  • Get treated: The longer that sleep apnea remains untreated, the worse its effects on your body. Your cardiovascular system, your liver, and your brain all suffer damage from lack of sleep caused by sleep apnea. This can be minimized by getting help early.
  • Lose weight: If you are overweight, start making an effort to get within a healthy weight range.
  • Stop smoking: Smoking doesn’t do your airways any favours …
  • Stop drinking: Reduce your alcohol intake to ‘occasional’ and see if this helps.
  • Elevate your head during sleep: If you have obstructive sleep apnea, this make make an enormous difference to the number of apneas you experience in a night, and the overall severity of the condition. And therefore your life insurance premiums!
  • Sleep on your side: This can have the same effect as elevating your head.

And of course, shop around for life insurance policies – every insurer looks on these conditions differently.

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Posted in Life Insurance | 136 Comments »

Solving Income Protection Insurance Disputes

March 11th, 2010

Life insurance claims are usually fairly clear-cut – a doctor provides a death certificate, and the insurance company pays out if the act was not self-inflicted and full disclosure was made at the time of selling the policy. However, income protection insurance carries significantly more terms and conditions that purchasers need to be aware of … hence, the dispute rate is much higher. If you have a dispute with your income protection insurance company, today we are looking at some ways you can resolve it.

income protection insurance

Monty Python's Argument Clinic ... not the ideal insurance dispute resolution service!

1.  Talk to your insurer

As well as being the first step dictated by common sense and courtesy, most other dispute resolution processes will require that you have tried to resolve the dispute with the insurer first. Make a formal complaint in writing, and if you don’t get the result you want, take it to the insurer’s IDR – their Internal Dispute Resolution office. The law states that you should get a response from the IDR within 15 days. If it is still not to your satisfaction, try the steps below.

2. The Financial Industry Complaint Service

The Insurance Ombudsman does not cover life insurance or income protection insurance – the watchdog for these policies is the Financial Industry Complaint  Service (FICS). You MUST have asked for a review of the insurer decision before proceeding to this step.

3.  FICS CEO

If the FICS conciliation procedures cannot resolve the complaint, it will proceed to a hearing. If the hearing result is not to your satisfaction, you can ask that it be referred to the CEO, who will go through the process of taking more steps of the same nature to resolve the complaint.

4. Alternative dispute resolution

You can also engage your own mediator or conciliator to help resolve the dispute. However, this will cost money – and you can get the service through the FICS for free

5.  Going to court

You will have to engage a solicitor to take the matter to court, and if you lose, you may be liable for the court costs of the insurer. Look for an objective solicitor that is confident that you will win the case, if you choose to take this route.

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Posted in Income Protection Insurance | 174 Comments »

6 Types of Life Insurance

March 8th, 2010

When most of us think of life insurance, we think of a ‘death’ equivalent of home or car insurance – you pay your premium until something bad happens, then you claim. In fact, life insurance is often far more complicated than that. It is a big investment, and insurers have thought of many ways to differentiate products to make them more suitable for different lifestyle and situations. Today  we look at 6 of the main types of life insurance.

1.  Term life insurance

This is the standard type of life insurance – you pay your premium yearly, and the insurance company pays out to your nominated beneficiaries when you die. This is the option that is suitable for most people.

2. Whole life or permanent insurance

It is a bit of a misnomer – the ‘whole of life’ really refers to the fact that your premiums stay level for the entire duration of the policy. Once you reach a certain age, your life insurance will start paying out. However, the difference in premiums between term and whole of life policies is not insignificant … whole of life policies can cost up to ten times as much.

3.  Death cover only

Again, this is the way most people understand life insurance. Either term or whole-life policies can be death cover only. The only insured event would be your death.

4. Total and permanent disability

If you either develop a degenerative disease, or are totally and permanently disabled (ie, you will never be able to work again in your life), some life insurance policies will start paying out your benefits. We think that all good life insurance policies should pay out for TPD – after all, the reason that you’re taking out insurance is for events which make you unable to provide for your family. TPD satisfies that criteria as much as death does.

5.  Critical illness or trauma insurance

These policies will pay out a specified sum if you contract an illness listed in the policy document. Around 30 conditions are usually covered, and heart attack, stroke and cancer form the majority of bases for claims.

6. Income protection insurance

As noted in the Total and Permanent Disability section, life insurance should cover you for when you are unable to provide for your family. Sometimes income protection insurance is considered a form of life insurance because of its nature in this respect.

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Posted in Life Insurance | 199 Comments »

The Fine Print: 5 More Things to Expect From Your Income Protection Insurance

March 4th, 2010

Please refer to the current Product Disclosure Statement (PDS) for more details about the key features described below. We recommend you read the entire PDS and any supplementary documents before making an investment decision.

Sound familiar?

Income protection insurance

These statements pervade our financial decision making so completely that many of us have ceased even to see them. It’s like checking the little box to read a website’s terms and conditions – you know you should, but why take so much time? Actually PDSs are a critical part of your income protection insurance decision (as they are for all financial products). While it is not possible for us to replace reading an entire PDS with a teeny weeny blog post, we can certainly make it easier for you! Today we’re looking at some of the terms and conditions you can expect as standard across many PDSs. Don’t let this replace reading your own … but use it to help you keep an eye out for pertinent clauses.

1. Monthly payments

The payment frequency for income protection insurance is not always clear. In many cases it is monthly rather than weekly (reduces administration costs for the insurer), so you’ll need to plan ahead with your cash more while on insurance benefits.

2.  Disability only

Most income protection insurance products are designed not to provide cover against redundancy or unemployment, but against not being able to work due to disability. This can be important to note!

3.  You will have to pay tax on your insurance benefits

You will only be receiving up to 75% of your usual income, but you will still have to pay tax on it. This is not strictly an insurance issue … they’re just telling you because they are nice people :-)

4. Maximum benefits

This varies from insurer to insurer, but a general figure is 75% of the first $30,000 of income per month can be paid in benefits.

5.  Hours worked per week

If you don’t work at least 20 hours per week, you will not be eligible for income protection insurance from many insurers. You should also check the fine print of your policy document or ask your actual insurer whether you will be eligible for a payout if your working hours reduce during the term of cover to less than 20 per week.

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Posted in Income Protection Insurance | 144 Comments »

How Are My Life Insurance Premiums Determined?

March 1st, 2010

Today we are taking an in-depth look at how your life insurance premiums are determined. You can find this information on many insurer websites … but it is often in one-word form, and you may be left with more question than you had initially! Today we go into the reasons WHY different factors affect your life insurance policy premiums.

Life insurance

Age

Obviously as you get older, your risk of dying increases every year. The insurance company is at greater risk of having to make a payout, so either charges you higher premiums, or reduces the amount that they say they will pay in the event of a claim.
You can get life insurance policies where the premium is fixed for the duration of your insurance, but these are often much more expensive in the short term, with no guarantee that ‘playing it safe’ will pay off.

Gender

Sexism is alive, well, and very much legal in the area of life insurance. Women will pay less than men for life insurance, because statistics show they live longer. However, based on actuarial data (insurance statistics), women make more income protection insurance claims than men, so will have to pay more for income protection insurance.

Smokers

Smokers have a 70% greater risk of death from coronary heart disease than non-smokers, and cardiovascular disease is THE LEADING cause of death worldwide. It causes almost 30% of all deaths in the world, more even than parasitic infections (which would include malaria), which come in at 23% or so. Obviously you’ll pay more for life insurance if you are a smoker. Some companies will only consider you a non-smoker if you have never smoked in your life, for others you may have to be cigarette-free for up to five years before you can apply for life insurance as a non-smoker.

Health and pre-existing conditions

The overwhelming majority of deaths are not from accidental causes, but from internal conditions in the body. For example:

  • Cardiovascular diseases, 29% of all deaths worldwide
  • Ischemic heart disease, 12% of all deaths worldwide
  • Cancers, all types, 12% of deaths worldwide
  • Stroke, 9% of all deaths worldwide

And unintentional injuries comes in at around 6% of deaths worldwide, as well as other conditions which cannot be indicated on a health report, like parasitic infections at 23% (though most of these deaths are in developing countries).

Insurers will charge you more for insurance if a doctor’s report reveals that you are more likely to die of one of these conditions.

Occupation

A minority of people actually die at work, so while your occupation makes less difference to your premiums than your health, it does still have an impact. If you are a manual labourer, you will pay more for life insurance than an office worker would.

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Posted in Life Insurance | 115 Comments »

In sickness and in health

February 27th, 2010

It’s sad to say that as I’m typing this – I’m sick. Not feeling well at all; I’ve got all sorts of aches and pains, from dizzying light-headedness to stomach churning nausea. When ever I get like this though, I have one thought: be more grateful for the times that we are not sick; appreciate our times of health and value the things we can do whilst healthy.

The symptom that always reminds me to be more grateful of my health is a common one: a blocked nose. It’s amazing how much you value being able to breathe easily when you’re struggling to breathe through your nose. Sure – you can just start gasping for air with your mouth, but there is nothing more satisfying than breathing deep through your nose, even if there isn’t anything to smell.

Go for it, do it now. Breathe in, breathe out. It’s a small exercise that you can do, to help you appreciate your health, and repeating that everyday will make you feel a little happier. Because appreciating what you have is important.

Unfortunately for some, that realisation of poor health isn’t always going to be a blocked nose, slight headache or nausea. Sometimes it can be lifestyle altering; the kind of news that has you pacing back and forth on the hospital floor or tapping next to the phone, waiting for the doctor to give you the news. It’s nerve wracking to wait for that critical phone call, often too involving for you to go run around making sure you’re financially supported.

This is where having the right life insurance helps give you that peace of mind you need. Because often you’re going to be too busy worrying and if you don’t have correct cover, your family can be left with large hospital bills on top of the grief that comes with funeral bills.

So do what you can for your family now; get the right life insurance policy, knowing that you’ll be protecting them, and their future.

Posted in Life Insurance | 132 Comments »

The Fine Print: 5 Things to Expect From Your Income Protection Insurance

February 25th, 2010

You have read the sentence a thousand times: “Nothing in this statement constitutes formal advice. For full details, please see the Product Disclosure Statement”. This is to be expected whenever you take out any loan product, any insurance product, or read any article by a financial institution. Today we’re aiming to make it a little easier for you – we are starting a series where we will examine the Product Disclosure Statement (PDS) for income protection insurance products from various companies, and let you know (in general) what the fine print says. Remember that you will always need to fully read your own income protection insurance PDS … but hopefully you can get a better idea of the ‘letter of the law’ before you take out a policy. Here are six general clauses you can expect to read in an income protection insurance PDS!

Income Protection Insurance

1.  Worldwide cover

Many income protection insurance providers will give you cover wherever you are in the world … and 24 hours a day. If this aspect of your insurance is especially important to you, though, do make sure you check your own PDS before purchasing.

2. Non-cancellation due to changes

While it is certainly not a blanket statement that insurers will continue to provide cover after a change in a person’s health, occupation or pastimes, the best insurers will provide this certainty. When you are starting skydiving university (!), the last thing you are thinking about is whether you should tell your insurance company! Look out for this statement in PDSs – it’s the mark of a good policy.

3.  Beginning and ending of cover

Cover usually commences on the day that you pay your first premium, although some income protection isurance companies give you a type of ‘cover note’, so you will be covered from the date that you accept the insurance. Then you would have a nominated period of time to pay your bill, usually from 14 to 30 days.

4. Self-inflicted acts

The Death Benefit portion of income protection insurance excludes payment of benefits for intentional self-inflicted acts such as drug-taking or suicide. While some insurers exclude these acts on a permanent basis, others exclude them for a defined period after starting or increasing the value of a policy.

5.  Self-inflicted acts – income protection

Self-inflicted acts that may affect the income protection portion of your insurance are also excluded … but usually for an indefinite amount of time. So, you cannot voluntarily break your leg in order to gain income protection benefits. And to be on the safe side, we would say that ’self-inflicted acts giving rise to a policy claim’ would also include things like putting laxatives in the boss’s coffee…

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Posted in Income Protection Insurance | 90 Comments »

4 Tips for Saving on Your Life Insurance

February 22nd, 2010

Your life insurance bill often seems like the most boring one in the letterbox! It’s one of the only things that you regularly pay for, but won’t see any benefit from in your lifetime. It makes sense to cut down the cost as much as possible; so today we are looking at ways you can save on your life insurance, without compromising having coverage for your loved ones in the event of your death.

1.  Buy term rather than permanent

Permanent life insurance policies have a cash component which is paid out after you reach a certain age. They are a way of forcing you to save money, and also seem like a good deal because, heck, after all, the insurance company is paying out and you haven’t even died yet!

However, these policies can be ultra-expensive … many financial advisers recommend that you simply get a cheaper term life insurance policy and invest the difference. You get more flexibility, more potential for return, and more likelihood that you’ll enjoy your money while alive.

2. Don’t ignore the little charges

Charges like annual fees and sales agent commissions can really add up in a life insurance policy, which is held for so long. Ask your life insurance company what the extra charges on your bill will be, before you commit.

3.  Don’t forego medical examinations

Yes, those medical examinations certainly feel like an invasion of privacy. However if you’re healthy, there is no point buying a policy where the insurer foregoes the medical exam … because you’ll be forking out for the privilege, every single month. Some research suggests that in only a few years of paying for one of these policies, you will have paid out more than your beneficiaries will ever receive.

4. Look around online

With many businesses trying to reduce their overheads and move towards an online business model, rather than serving people in person, you can often get great discounts by looking for a life insurance policy online. If you have any questions, you can always drop into the insurer’s office, or make a phone call and get clarification. But you’ll get the cheapest quote by looking online in the vast majority of cases.

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Posted in Life Insurance | 144 Comments »

Choices

February 20th, 2010

They say that in the new age of technological advancements that we live in, we’re very privileged with the conveniences we have. Ever have your grandparents tell you how easy we have it; how back in their day they had to walk 40 miles through snow to get to school. Now we have all manners of new transport they didn’t have “back in the day”. New transport such as cars, buses, trams, scooters, skateboards, and (depending on how old your grandparents are) bicycles.

What it boils down to is choice. Why are we privileged? Because we are given so many options in performing one simple task, such as travelling 40 miles to school. It’s not just transport that has given us a wide range and variety to choose from. Food, clothing, banks, telephones; anything you can think of there is generally more than one option. Insurance is no different.

There are hundreds of different insurance companies that you could pick from. You might be thinking, great, well if I have all these choices, I’m obviously going to get to pick the right one for me.

Alas, this is not so. There comes a time when too many choices become a burden. We have only so much time in our busy lives, and sometimes we need to make a choice quick.

Unfortunately, income protection isn’t something we can just make a quick choice about. There are so many different levels of cover, so many different premiums, payment options, the list goes on!

Luckily, there is a tool to help us make it more convenient. http://www.ratedetective.com can make comparing income protection insurance so much easier. Don’t you love technological advancement?

So do it now! The choices are there for you to make and you don’t have to walk 40 miles through snow, sleet and rain to get there. Just jump on the website and start comparing. You’ll be glad you did.

Posted in Income Protection Insurance, Life Insurance | 64 Comments »

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