May 24, 2021

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Life Insurance – Can I appeal against an Underwriting Decision?

Can I appeal against an underwriting decision?

Our client

We were contacted by Mrs D, a 66-year-old widow who 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 should she die within 7 years of providing the gift, so she wanted a life insurance policy to ensure that funds will be available to cover the tax bill should this occur.

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. This is a policy where the sum assured reduces over the term in line with the tax liability. The policy was quoted with a monthly cost of £179.67 on non-smoker rates and Mrs D was happy to apply.

The insurer wanted Mrs D to complete a medical due to her age and the level of cover she was applying for, so they arranged for a nurse to visit her at home.

Our Process and advice

At Future Proof, we have access to specialist insurance companies that don’t deal directly with the public. These companies offer more specialised policies, designed to provide cover where other major providers can’t.

Our research process involves us contacting many insurers to find out the best possible outcome for our clients. Which avoids any nasty shocks later on during the underwriting process.

Would the insurer add a ‘loading’ to their standard premium? (this is an additional sum charged on top of their standard monthly premium to reflect their additional risk). Or, exclude a condition?

Might they decline the application? We want to avoid wasting time by making applications that may be declined.

We have up to date knowledge of the ever-changing landscape of underwriting for all providers in the UK. Future Proof is committed to thorough research so that you don’t have to. What’s more, our advice comes at no obligation and with no hidden costs.  You don’t pay us directly but we do get paid by the insurer if you decide to start a policy with them.

A disappointing outcome – Can I appeal against an underwriting decision?

On receipt of the nurse’s report, the insurer felt that a loading of 75% on top of their standard quoted premium was warranted. Consequently, the monthly cost of the cover increased from £179.67 to £322.60.
Mrs D was understandably unhappy with the increased cost and requested full details of why they had made this decision. The insurer sent a copy of the medical report to her GP along with their reasons for increasing her premium. The main concerns the insurer had were that her
weight (BMI) was marginally more than she had stated, and more importantly, her blood pressure was very high.

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

An Underwriting decision can be reconsidered

The insurer re-assessed her application based on her GP’s comments and agreed to reduce the loading on her premium from 75% to 50%, so her premium decreased to £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, which she and her family considered to be a cost-effective way of covering the potential inheritance tax bill of £340,000 and the policy is now in place.

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.

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 online, we would recommend you speak to one of our advisers.

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

An online 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.

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

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Why you can trust Future Proof.

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

Do you suffer from 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.

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The existence of a link to another website does not imply or express
endorsement of its provider, products or services by us or St. James’s Place.