Check the Small Print

Tuesday, March 2, 2010

The life insurance industry has made vast improvements. Increased market competition and regulatory changes have ultimately benefitted the consumer.

However, the last twelve months have seen some changes to life cover that existing policyholder, as well as those currently researching the market to make an investment into health cover, should keep at the forefront of their minds before choosing or changing their policies.

Those who have undertaken genetic tests that can ascertain to some degree their predisposition to certain illnesses, such as cancer, could face problems or certain exclusions in terms of life insurance. Essentially, these tests can provide the candidate with an assessment of the likelihood of developing diseases based on their DNA.

All is not doom and gloom though, as currently there is a voluntary agreement that stops life insurance providers from asking whether or not potential customers have taken one of these tests and they certainly cannot ask their client to take a test.

The worry is that this agreement or moratorium is due to run out in 2014, which is causing concern for those who have taken these tests that life insurance might be denied to them in the future.

The tests are now available as DIY kits that cost as little as £700 and the manufacturers claim that these tests can help clients arm themselves with potential dangers ahead of them, which gives them an opportunity to try and minimise these dangers. In the cases of those who discover that they have a disposition to obesity, an early warning of this danger can certainly help to mitigate against harm caused further on down the line.

Whether or not the end of the moratorium will impact those who have taken these tests in terms of availability of life insurance, exclusion from some policies or premium price, remains to be seen. The ability, however, for certain individuals to understand and have a clearer picture of whether they are more likely to contract or suffer from particular illness must surely be a positive. There are of course critics that doubt the accuracy of these tests and the resulting lack of counseling that may be required.

Any change in lifestyle, however, that will have a mitigating effect against illness in the future can only be regarded as a good thing and can help proactively reduce the risk. On another positive note, there is a call to the Government to update the moratorium between insurance providers to stop them asking for the data from these tests once the agreement ends in 2014. It remains for us, the client, to ensure we keep ourselves up-to-date and check the small print. Good advice for most purchases these days.

Dawn Bridge.