Moneysworth shares details of its first accepted application as part of Royal London's mental health pilot
A client of Moneysworth has obtained nearly £170,000 of life cover for a 30-year-term at a guaranteed premium rate of £9 a month, despite previously being declined due to his mental health history, which included a significant event within the last five years.
The accepted application is the first example of Moneysworth securing life cover as part of a pilot involving three specialist adviser firms announced by Royal London last week.
The insurer's underwriting trial is aimed at providing life cover for those with a history of - or living with - serious mental health conditions.
In a blog post, Moneysworth said the client was looking for life insurance to cover the mortgage on their family's home, however the client had been declined cover by two major insurance companies.
The client told the adviser firm: "When I first applied for life insurance, being told by my initial advisor [name supplied] that my condition and medical history, which had been caused by a hardship in my life, would make it both difficult for me to obtain life insurance, and could potentially mean I can't obtain life insurance, was a real scare for me, and made me feel guilty for going through what I had gone through and trying to seek help during a tough period in my life. A period where I should have been excited and overjoyed buying a house with my partner was overlooked by more anxiety and worry that I wouldn't be able to obtain life insurance to make sure the mortgage for my partner was sorted if I were to pass (which frankly I find really unfair)."
After getting details about his mental health history, Moneysworth contacted underwriters at insurance companies to find some would decline the application, while others said they might charge 1000% to 1500% standard rates.
The customer, who said he had been told by one insurance company "not to bother [applying again] for around five years", told the broker: "The thought of having to pay 10-15 times the normal premium for life insurance as a first time buyer with all my other bills to worry about felt unfair, as I have mentioned above. I don't drink (expect for very special occasions), I don't smoke, I stay fit and physically healthy. It felt like insurance companies were manipulating a hardship in my life that really took its toll on me and that I did not want to be reminded of. I didn't do what I did in the past for the sake of it, it was a genuine time in my life where I struggled, and I think that insurance companies are failing to recognise this."
Through the Royal London mental health underwriting trial, Moneysworth was able to offer the £9-a-month life cover for death from all causes, with the exception of suicide.
The client told Moneysworth that had the cover not been available, he would have relied on the death in service provided by his employer rather than pay 10 to 15 times extra for his premium. However had the group life insurance not been in place, he said he would have had no choice but to reluctantly pay the higher premium.
He said: "Getting life insurance was so important to me, as I want my partner to be financially stable if I were to pass, even though I have a death in service benefit at work, the mortgage would take a large chunk of money from this, and there are other things that the money would need to go towards upon my death, and as such, a specific life insurance for my mortgage was really important. When Moneysworth told me I could get normal terms with the exclusion placed in, I was delighted, I know now how to deal with any struggles I have, and have been provided with the tools to combat my down moments by therapists. Ultimately it gave me the peace of mind I was searching for, and I'm not sure why this arrangement has not been adopted by insurance companies sooner, knowing how I felt and the situation I was in, I hate to think how they have made others with struggles feel, especially those who have been in a worse situation than me."
From ‘money takers’ to ‘health helpers’?
'Technology will be the key'
‘We need to investigate the root cause’
Expected early 2020
Via Cura, Moneysworth and The Insurance Surgery