6th September 2021

Nervous of applying for life insurance or mortgage protection cover because of a cancer related illness?  Don’t be ... as life companies are far more flexible and understanding in terms of their underwriting views than you would think...

The old cliché ‘nothing is easy’ is very true when it comes to getting mortgage approval. It seems in 2021 that unless you are Jeff Bezos the requirements foisted upon you by the banks are onerous. Simply put, they do not want their balance sheets ravaged by any repeats of the 2008-2012 property crash so they want their asses covered and more.

Thus, by the time the poor old house buyer gets around to buying the mandatory life cover for their mortgage loan, the words ‘brains fried ‘are very much in vogue. Heightening their fragile state of mind is any medical issue they have or think they have as fears of not being able to get the required life cover become very real indeed. 

Fortunately, the life companies who underwrite the mortgage protection market are a different breed to their banking cousins and they strive to provide mortgage protection cover to almost anyone who applies for it. Typically, over 95% of applicants for mortgage protection, or indeed life insurance, get accepted for cover at what are called ‘standard rates’.  Being accepted at standard rates simply means that the quote you got from your bank or broker for your cover (or hopefully you got online from a provider like Low.ie) is what you will pay monthly or annually over the term of your policy with no extra (or loading as it is called in the industry) charges being imposed because the life insurer views you as more of a risk than someone who has no medical conditions. Read our blog about cancer cover.
Let’s now take a look at sadly an increasingly common illness namely that of cancer and how it may affect applicants when they apply for cover.
What is it?
Cancer is a condition where cells in a specific part of the body grow and reproduce uncontrollably. The cancerous cells can invade and destroy surrounding healthy tissue, including organs.
What evidence will be required?
• GP questionnaire – Not all the time but in most cases. 
• PMAR (Private Medical Attendant’s Report i.e. a report from your doctor) – sometimes.
What are the indicative terms?
Where an individual has had or currently has cancer there is no escaping a rating on their life insurance. 
If the cancer was low grade and there has been some years since treatment the rating can vary from low to medium. If the cancer diagnosis has been more recent and was a medium grade then the rating would be medium to high so the cost of cover would be commensurately high.
Sadly, if the cancer had spread to other areas of the body and was a recent diagnosis or was a recurrence the life companies at best would give a postponement with most cases being declined. 
The considerations the underwriters take into play when they are making their call on this side are as follows:

Staging and grading of the cancer
• Location(s) and type of cancer
• Date of diagnosis
• Details of investigations
• Details of treatment and date of treatment completion
It is worth highlighting that Royal London will underwrite all applicants with a history of cancer with receipt of medical evidence for their innovative Multi-Claim Protection Cover product. If terms are available for life cover, a cancer exclusion may apply. This exclusion differs depending on the type of cancer. 

We have alluded above to low, medium and high ratings but what do they mean for customers who apply for mortgage protection or life insurance. The best way to show what they mean and their impact is to give some examples.
John is 35 years old and is applying for €200,000 life cover for 40 years so that should anything happen to him – his wife and children have a lump sum to help them deal with living expenses, educational fees, loans etc.
Scenario 1
John is healthy and a non -smoker. He goes on Low.ie and gets a quote for €22.96 per month. The life company are happy to provide the cover at ordinary rates so John will get that €200,000 life insurance for the next 40 years and pay that premium of just €22.96 per month
Scenario 2
John has high blood pressure and has not being getting regular reviews. The life company deem there is a risk involved so they give John a low rating of +50%. What this means is for John his €200,000 of life cover will now cost an additional €11.48 per month i.e. 50% of the premium. Thus, he will be paying €34.44 per month.

Scenario 3
John has Rheumatoid Arthritis and he suffers quite badly from it. The underwriters in the life company revert that they will provide the cover but with a medium rating or loading of +100%. In effect, John now has to pay double his quoted premium of €22.96 per month i.e. €45.92 per month.
Scenario 4
John had prostrate cancer three years ago but is fully recovered now. The life company view the underwriting risk here as still being towards the higher end of the scale so he is given a high rating of +225%. His monthly premium now rises to €51.66 per month if he wishes to go ahead and get the cover.

Note that the example here is of a single individual. If John decided to get cover for him and his wife and she was fine and healthy – their premium would only reflect the rating on his side of it so to speak as his wife would not be rated i.e. the loading does not apply to the total premium.

Ratings or loadings will always apply to the relevant policy from the start. If the individual or individuals that were rated fully recover from the illness that caused the rating and their health is good then they are best cancelling the policy and applying for a new one as the life companies will not adjust the cost of their premiums on their existing policy if their health improves.

In summary, it is tough for individuals who have had cancer but if they are looking for mortgage protection/life insurance – they should still apply for cover. It is really a case of ‘if you’re not in you can’t win’ as there is a chance one of the life companies will provide the cover but there will be a rating involved.

A good broker such as Low.ie will try and find the best life company to provide the cover you require at the best price as that is the essence of our job. They will also ‘hold your hand’ throughout the process and explain any reasons for a rating being given.