My client wants to take out a life policy, but is worried they might have missed out some GP appointments over the past five years in their application. Will this affect them getting cover, and how do I reassure them?
Barry Pappin, Vita
When completing an application form with an insurer, it is very important to answer all questions accurately and truthfully to avoid any potential non-disclosure. Insurers will not routinely request medical evidences (such as GP notes) to 'check' what information has been presented to them, therefore the onus is on the client.
The questions asked on an application form can vary depending on the insurer and the type of benefit being applied for (life assurance, critical illness cover or income protection).
Some people may perceive the questions to be too in-depth, others may feel the opposite and be concerned that certain information regarding their health or lifestyle isn't prompted or requested during the process. However, a client is required to answer only the specific questions asked.
If a client is in doubt, it is far better to over-disclose and provide additional information to the insurer via their adviser or direct. Prudence should always be encouraged, because it provides peace of mind, but it may also cause unnecessary delays in cover being offered.
Each insurer will send a copy of the completed application form to the client to check, including all of the questions and answers. This is an ideal opportunity for the client to speak with their GP surgery and check their responses (in light of their medical history) to ensure accuracy.
Should any amendments need to be made, inform the adviser/insurer immediately.
Mark Dennison, LightBlue UK
While it is important to disclose all of the information requested by an underwriter, it is also important not to volunteer information that hasn't been requested. For example, if a question on the application form asks for details of your medical history in the previous five years, don't give them information from 15 years ago.
An underwriter will be obligated to act on any disclosure volunteered, but not requested and so the important thing is to answer questions honestly and disclose all facts that are 'material' (or relevant).
As long as you have done this, the ABI Code says no one should ever be worse off as a result of a genuine mistake, therefore this client should not have anything to worry about. Many insurers are now requesting a client's full medical history from their GP and therefore the non-disclosure issue is likely to become less of a problem going forward.
It is also worth remembering that the number of declined claims for life insurance policies each year is extremely small, about 1%, although public perception is that the figure is much higher.
Nowadays insurers produce plenty of marketing material that back up the fact that they do what they promise – pay claims – and as long as the client's application answers are open and honest, they have nothing to worry about.
In the event of any problem, the adviser is there to fight for them in any case, which adds extra value to the service the adviser is offering.
Emma Thomson, Lifesearch
First, it is good that your client is mindful of ensuring all information is disclosed. Very few clients have claims turned down for non-disclosure, but it can happen when not enough care is taken when completing the application.
The onus is on the insurer to ask the right questions. So, for example, a question asking about episodes of mental illness within the past five years means an episode of post-natal depression that occurred eight years ago can be left off the application.
Your client does not therefore need to worry about including every health issue they have ever had: if it's not asked about, it doesn't need to be disclosed.
In terms of a specific health condition, it is usually not necessary to include every individual GP appointment, as long as the condition, symptoms and treatment are disclosed fully.
That said, if your client really is unsure and thinks they might be forgetting some pertinent appointments, I recommend they double check with their surgery. Most clients are underwritten without the insurer seeking either a report from the GP or a medical examination, so information on the application is vital.
Some insurers ask for GP reports in only about 10% of cases, meaning clients cannot rely on their GP filling in the blanks. It is unlikely forgotten appointments will affect your client getting cover, but if they were important ones that should have been disclosed, it could affect the claim.
Ask your client to check with their surgery to give them peace of mind.
Pauline Johnson, The Mortgage Broker
I have a client and their spouse who were looking to take out life cover. They ordered their medical records back to 1992, but as a lot of it was in medical speak they didn't understand it. It also reminded them of a medical issue that happened last year.
They were worried asking when is non-disclosure not non-disclosure? They found the questions very ambiguous and they were very scared that the claim would not pay out. They tried to remember everything they could in their medical history.
They are worried if they couldn't remember, say, a fainting episode that occurred once, if it turned out that was related to a medical condition that caused serious illness or death, down the line.
They are so cautious that they haven't taken out the cover. They were also put off by reading the Friends Life case where a man had his critical illness and life cover claim rejected due to non-disclosure (from 2012).
They are scared in case something crops up in medical notes that they cannot understand and stops the claim from paying out. Most clients take it as it is.
They are looking at £40 per month premiums and saying they really do want cover, but they wouldn't want it if they wouldn't get a payout. The £40 is a lot per month for them both.
I have told the client: the chances of insurers not paying out claims is far less common than claims being paid.
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